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The Week in Business: Mass layoffs at Meta

    What started as a hiatus in hiring at Meta escalated into mass layoffs last week, with company founder Mark Zuckerberg laying off more than 11,000 employees, or about 13 percent of the workforce. He said the company, the parent company of Facebook, Instagram and WhatsApp, had grown too fast during the pandemic, when a boom in online commerce fueled many tech companies. The layoffs were the latest in a series of cuts and freezes in the sector. In the past few weeks alone, Twitter, Stripe and Lyft collectively laid off thousands of employees, and Amazon said it was halting hiring for its corporate staff. The layoffs could tell a bigger story about the outlook for the economy. But in some cases, unique factors contributed to the cuts: Twitter’s upheaval is largely due to its acquisition of Elon Musk, while Meta has invested billions in Zuckerberg’s vision of the metaverse, at a time when the company already struggling financially.

    After months of persistently high inflation, consumer prices are finally showing signs of easing. The consumer price index rose 7.7 percent in the year through October, slower than the 7.9 percent economists had expected before the new data was released on Thursday. The report is likely to be encouraging to Federal Reserve officials, who have quickly raised interest rates this year to tame inflation and cool the economy. Past inflation reports and other indicators had shown that many parts of the economy remained relatively resilient despite the Fed’s continued efforts, leading to concerns that the central bank’s aggressive path would lead to a recession. But stocks rose on Thursday, with investors seeing the latest inflation data as an indication that the Fed could soften its approach. The S&P 500 rose 5.5 percent, its best one-day performance in more than two years.

    A painful week for the crypto world ended when FTX, one of the largest cryptocurrency exchanges, filed for bankruptcy and changed its leadership. The saga began with a potential deal that promised to save FTX. The exchange had gone through tough times after Changpeng Zhao, the chief executive of a bigger rival called Binance, questioned the stability of the company, leading people to take the equivalent of billions of dollars from the platform. That turned out to create a liquidity problem for FTX, formerly run by Sam Bankman-Fried. Mr Zhao then said he would acquire FTX, a proposal that would have effectively saved the company, but he called it off just a day later, citing investigations by regulators and reports of mishandling funds.

    Ahead of Black Friday, one of the country’s biggest shopping days, numerous retailers, including Target, Macy’s and Walmart, will release their quarterly results. Their most recent reports painted a grim picture: Target has seen its profit plummet this year and has struggled with excess inventory in recent quarters as inflation-conscious customers stop spending as much on electronics and apparel. Macy’s was similarly challenged by a glut of inventory the last time it reported results. Walmart has also not been immune to the effects of high inflation, reporting that customers spent more on essential, cheaper items, but withdrew on goods they deemed more discretionary. Investors and analysts will keep a close eye on whether these retailers have solved their inventory problems and how much discounts on that inventory have affected profits.