Meta Cuts 10% of Workforce as Tech Giants Face Headwinds; Markets Pull Back from Records
Meta announced layoffs of approximately 8,000 employees while tech stocks declined from record highs due to oil price spikes and uncertainty over the Iran conflict. American Airlines and other carriers cut profit forecasts due to rising fuel costs.
Meta's Workforce Reduction
Meta will lay off 10% of its workforce, equating to about 8,000 employees, as it continues investing heavily into artificial intelligence. The social media giant will initiate the job cuts on May 20, and is scrapping plans to hire people for 6,000 open roles.
Stock Market Pullback
Stocks pulled back on Thursday, led by a drop in software and higher oil prices, with investor uncertainty toward the trajectory of the Iran war hovering over the market. The S&P 500 last traded down 0.5% after earlier hitting a new all-time intraday high. The tech-heavy Nasdaq Composite declined 0.9%.
Corporate Earnings Pressures
Shares of IBM and ServiceNow tumbled 8% and 17%, respectively, after the companies posted their latest quarterly results. While IBM's beat on the top and bottom lines, the company maintained its full-year guidance, disappointing investors. American Airlines said surging fuel costs are weighing on its full-year outlook. The carrier now expects an adjusted full-year loss of 40 cents per share to earnings of $1.10 per share. That's significantly lower than its forecast for earnings of $1.70 to $2.70 per share in January.
Oil Price Spike
Oil prices spiked in midday Thursday trading. Western Texas Intermediate crude futures jumped nearly 4%, crossing $96.50.