Vice Media, known for its edgy content, will cease publishing new content on its flagship website and lay off several hundred staff as part of a strategic shift to partner with other media companies. The move reflects the broader struggles of news outlets in the digital era, with traditional and digital media alike facing challenges in finding a viable business model. This comes amid a wave of job cuts in the industry, with Vice's rivals like BuzzFeed News and Jezebel shutting down last year, and layoffs announced at other major media outlets.
U.S. employers grappling with the high costs of obesity drugs like Novo Nordisk's Wegovy are turning to virtual healthcare providers such as Teladoc to implement weight-loss management programs. These programs may require diet and exercise before granting access to the medications, potentially becoming employees' sole covered option. By limiting employees to smaller networks of providers or delaying prescriptions with lifestyle change mandates, companies hope to cut costs. More than a quarter of surveyed employers plan to use virtual providers for obesity drug prescriptions next year. The market for virtual obesity drug management is projected to reach $700 million in 2024 and potentially grow to $9 billion in the long term.
Hasbro, the international toy company, is closing its Providence office and laying off 1,100 employees, in addition to the 800 jobs cut in January. The layoffs will be implemented over the next year, with a focus on minimizing management layers. The company plans to consolidate its operations in its Pawtucket headquarters by January 2025. Hasbro cites the need to modernize and streamline its organization to ensure profitability amid challenging market conditions. The cost savings will be invested in new systems, product development, and digital capabilities. Hasbro's stock is currently at its lowest point in a decade.
Biglaw firms in the US are reducing the number of first-year associates they hire, with the average number of new hires down by nearly 17% among Am Law 100 firms and 25% among Am Law 200 firms. Midsize firms also brought in 9% fewer first-year associates. This decline in hiring is part of cost-cutting measures to maintain profitability, as overall law firm direct expenses increased by over 6% in Q3 2023. However, there is still a strong lateral market for experienced attorneys.
CBRE Group, the world's largest commercial property brokerage, reported a 56% drop in profit for the third quarter as the sluggish real estate market and economic uncertainty continue to impact property markets. The company plans to cut costs by $150 million, primarily focused on its transaction-focused business lines. CBRE expects a recovery in the capital markets to be delayed until the second half of 2024 due to high interest rates and ongoing economic uncertainty. Despite the challenges, CBRE remains committed to seeking merger and acquisition opportunities and has earmarked funds for capitalizing on the current environment. The company also announced a partnership with the investment banking team from Sera Global to enhance its global investment banking capabilities.
Charles Schwab is planning to reduce its headcount and real estate footprint as part of cost-cutting measures aimed at streamlining operations. The move is said to be directly related to the integration of TD Ameritrade, which Schwab acquired in 2020. The company intends to close or downsize some of its corporate offices and reduce operating costs primarily through lower headcount and professional services. While the exact number of job cuts is not specified, the company expects to save at least $500 million annually through these measures, although it may incur similar costs in employee compensation benefits and facility exit costs. The layoffs are expected to occur before the end of the year, while real estate exit costs may extend into 2024.
Nonprofit theaters across the United States are facing a financial crisis as attendance remains below pre-pandemic levels and costs continue to rise. Theaters such as Center Theatre Group in Los Angeles and The Public Theater in New York have already implemented cost-cutting measures and layoffs. The lack of a new model for producing theater and the depletion of government funding have exacerbated the situation. Nonprofit leaders are calling for increased funding from the federal government to support the National Endowment for the Arts and provide grants to theaters. Theaters are also exploring innovative approaches and seeking philanthropic support to navigate the challenging landscape.
Elon Musk stated that Twitter's cash flow remains negative due to a nearly 50% drop in advertising revenue and a heavy debt load. Despite aggressive cost-cutting measures, Twitter has not achieved positive cash flow as quickly as Musk had anticipated. The company's ad revenue may not have recovered as fast as previously suggested, leading to concerns about its financial outlook. Musk's recent hiring of a former ad chief signals a focus on ad sales, while Twitter also plans to increase subscription revenue and explore partnerships in video, creator, and commerce.
Carvana's share price surged almost 50% after the online used-car retailer announced that it expects to improve its profit metrics in Q2 2023 due to cost-cutting measures.
Google CEO Sundar Pichai earned $226 million in total compensation in 2022, including $218 million in stock awards, despite the company's sweeping layoffs and cuts to worker perks. The massive payday for Pichai and other top Alphabet executives stood in stark contrast to the company's belt-tightening efforts as it refocuses on advanced AI technology. The layoffs have sparked outrage among Google employees, who have staged protests over upper management's handling of the cost-cutting measures.
Google CEO Sundar Pichai's compensation for 2022 was valued at $226 million, including a triannual stock award worth over $200 million. This is lower than his 2019 compensation of $281 million, which also included a stock grant. Pichai had previously announced cost-cutting measures, including lower bonuses for top executives and layoffs.
Walt Disney Co. is reportedly set to lay off thousands of employees next week, including about 15% of the Disney staff in the entertainment division. The job cuts will affect every region where Disney operates, including TV and film divisions, theme parks, and corporate positions. This move comes as part of the company's cost-cutting measures to save $5.5 billion in annual costs, and follows the announcement of 7,000 job cuts in February.
Micron Technology, the largest US maker of memory chips, has given a better sales forecast for the current quarter than some analysts had feared, sparking hope that the worst of a brutal industry slump may be over. The forecast suggests the memory chip market may be poised for a comeback after a rough stretch. Micron is projecting a loss of about $1.58 a share in the current period, which includes a 45-cent impact associated with $500 million in inventory writedowns. The company is also increasing job cuts and reducing its spending on new plants and equipment by 40% to $7 billion this year.
