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Zoom shares closed up nearly 10% after the company announced on Tuesday that it plans to lay off 1,300 people, or roughly 15% of its workforce. 

Why it matters: It's the latest tech company to readjust their organization in response to waning levels of pandemic-era demand.

What they're saying: "We didn’t take as much time as we should have to thoroughly analyze our teams or assess if we were growing sustainably, toward the highest priorities," CEO Eric Yuan wrote in a post.

He added that the layoffs impact every part of the company and that he also plans to cut his own salary by 98% for the coming fiscal year and forgo his fiscal year 2023 corporate bonus. 

What to watch: The cuts come on the heels of the company guiding for weaker-than-expected revenue for its full fiscal year.

Zoom is expected to report fourth quarter and fiscal year 2023 results on Feb. 27. 

Tech layoffs partially cloud economic realityLayoffs are tech's new normal

Tech layoffs partially cloud economic reality

Zoom laying off 15% of workforce

CEO Eric Yuan said he also plans to reduce his salary by 98% for the coming fiscal year.

Big Tech

Zoom shares closed up nearly 10% after the company announced on Tuesday that it plans to lay off 1,300 people, or roughly 15% of its workforce. Why it matters: It&#x27;s the latest tech company to readjust their organization in response to waning levels of pandemic-era demand.

After a record economic expansion, the coronavirus pandemic sent the U.S. economy into a recession as unemployment soared to staggering heights. The country now faces urgent questions about how much stimulus is needed for reeling consumers and businesses, and what a recovery might look like.

Economy & Business

From the Valley to D.C., Big Tech players like Facebook, Google and Amazon are under more scrutiny than ever as new technology develops and privacy and antitrust concerns grow in lockstep with companies’ ambitions.

Technology

The state of the consumer is strong, according to Uber CEO Dara Khosrowshahi.

What they're saying: "We have looked and looked ... we're not seeing any signs of consumer weakness at this point," he told CNBC Wednesday morning following the company's latest earnings report which reflected its "strongest quarter ever."

Why it matters: Anxious economic sentiment is everywhere despite evidence to the contrary. 

By the numbers: Trips on Uber's platform during the fourth quarter of 2022 grew 19% from the same period in 2021 to 2.1 billion — an all-time quarterly high, roughly 23 million trips per day on average.

Khosrowshahi also told analysts that Uber served its highest-ever average monthly mobility active platform consumers during the quarter, with over 100 million customers.

The big picture: Recession watch has become a global obsession as shades of "pandemic paranoia" restrain optimism. 

"Everyone's anticipating a slowdown, but hadn't seen proof of a slowdown yet," Becky Frankiewicz, president and chief commercial officer of ManpowerGroup NA, previously told Axios.

"Pandemic paranoia" clouds economic reality

If you’re wondering when a recession will arrive, pay attention to your own behavior

Uber CEO: We see no signs of consumer weakness

Despite macroeconomic uncertainty, Uber CEO Dara Khosrowshahi says he's "more confident than ever" in the business.

Economy

The state of the consumer is strong, according to Uber CEO Dara Khosrowshahi.What they&#x27;re saying: &quot;We have looked and looked ... we&#x27;re not seeing any signs of consumer weakness at this point,&quot; he told <a class="gtmContentClick" data-vars-link-text="CNBC" data-vars-click-url="https://www.cnbc.com/2023/02/08/uber-earnings-q4-2022.html" data-vars-content-id="496682c9-1cb9-4d96-b9a4-4c44fd866aef" data-vars-headline="Uber CEO: We see no signs of consumer weakness" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.cnbc.com/2023/02/08/uber-earnings-q4-2022.html" target="_blank">CNBC</a> Wednesday morning following the company&#x27;s latest earnings <a class="gtmContentClick" data-vars-link-text="report" data-vars-click-url="https://investor.uber.com/news-events/news/press-release-details/2023/Uber-Announces-Results-for-Fourth-Quarter-and-Full-Year-2022/default.aspx" data-vars-content-id="496682c9-1cb9-4d96-b9a4-4c44fd866aef" data-vars-headline="Uber CEO: We see no signs of consumer weakness" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://investor.uber.com/news-events/news/press-release-details/2023/Uber-Announces-Results-for-Fourth-Quarter-and-Full-Year-2022/default.aspx" target="_blank">report</a> which reflected its &quot;strongest quarter ever.&quot;

Buy-now, pay-later giant Affirm announced on Wednesday afternoon that it is cutting 19% of its workforce — about 500 people — alongside earnings results that missed analyst expectations. 

Context: The reduction will reset the company to the size it was "between 6 and 12 months ago," CEO Max Levchin wrote in a note to employees. 

"The root cause of where we are today is that I acted too slowly [as] macroeconomic changes unfolded," he said, citing a "mid-2022" shift as the Fed increased rates.

Levchin's stated mistake also comes as Affirm had already trimmed about 1% of its staff toward the end of last year.

The big picture: E-commerce business leaders have talked often about the "pull-forward effect" the pandemic has had on their industry. 

That is, demand they would have seen in future years arrived all at once during lockdowns and stay-at-home periods. 

When payment platform Stripe announced a 14% cut to its staff last fall, CEO Patrick Collison said they were “much too optimistic” about how quickly internet businesses would grow in the near term, expecting that pull-forward demand to continue. 

What to watch: Shares of Affirm plunged as much as 21% after hours on Wednesday. 

Regulators now one step closer to reining in "Buy now, pay later" companies

Affirm slashes 19% of jobs

Like other e-commerce players, Affirm is cutting jobs to fit new economic environment.

PayPal Co-Founder & Affirm CEO Max Levchin. Photo by John Lamparski/Getty Images

E-commerce payment systems

Buy-now, pay-later giant Affirm announced on Wednesday afternoon that it is cutting 19% of its workforce — about <a class="gtmContentClick" data-vars-link-text="500 people" data-vars-click-url="https://www.sec.gov/ix?doc=/Archives/edgar/data/0001820953/000182095323000002/afrm-20221231.htm" data-vars-content-id="4e4bcdd1-169f-4ec1-b48b-c41d02bfdb52" data-vars-headline="Affirm slashes 19% of jobs" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.sec.gov/ix?doc=/Archives/edgar/data/0001820953/000182095323000002/afrm-20221231.htm" target="_blank">500 people</a> — alongside earnings results that <a class="gtmContentClick" data-vars-link-text="missed analyst expectations" data-vars-click-url="https://www.cnbc.com/2023/02/08/affirm-cuts-19percent-of-workforce-shares-tank-on-earnings-miss.html" data-vars-content-id="4e4bcdd1-169f-4ec1-b48b-c41d02bfdb52" data-vars-headline="Affirm slashes 19% of jobs" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.cnbc.com/2023/02/08/affirm-cuts-19percent-of-workforce-shares-tank-on-earnings-miss.html" target="_blank">missed analyst expectations</a>. Context: The reduction will reset the company to the size it was &quot;between 6 and 12 months ago,&quot; CEO Max Levchin <a class="gtmContentClick" data-vars-link-text="wrote" data-vars-click-url="https://investors.affirm.com/news-releases/news-release-details/message-founder-and-ceo-max-levchin" data-vars-content-id="4e4bcdd1-169f-4ec1-b48b-c41d02bfdb52" data-vars-headline="Affirm slashes 19% of jobs" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://investors.affirm.com/news-releases/news-release-details/message-founder-and-ceo-max-levchin" target="_blank">wrote</a> in a note to employees.

Black small-business owners feel more optimistic about this year than their peers, Goldman Sachs' latest 10,000 Small Businesses Voices survey shows.

Why it matters: Despite higher operating costs and systemically greater financing obstacles, some Black small-business owners surveyed in late January say they’ve emerged from the last few years more confident in their ability to manage through challenges and that they see more growth opportunities than they have in the past.

“Not only having to face the business challenges, but the health challenges and then the societal challenges …whatever we face next, it's a drop in the bucket compared to what we've been through from 2020 to late 2021,” Jessica Johnson-Cope, owner of Johnson Security Bureau in New York, tells Axios. 

By the numbers: 81% of Black small-business owners are optimistic about the financial trajectory of their business in 2023, compared to 68% of the overall surveyed population, according to results shared first with Axios.

78% of Black business owners expect their business to increase profits, compared to 60% overall.

67% expect their business to create new jobs, compared to 51% overall.

67% are currently hiring full-time or part-time employees, compared to 59% overall.

Yes, but: 45% of Black small-business owners say they've dipped into their personal savings over the past three months in order to keep their business afloat — compared to 33% of the overall small business population surveyed.

Those numbers are up from January of 2022, from 38% and 23%, respectively. 

37% of Black small-business owners also say they've found it difficult to access new capital and financing versus 23% overall.

In January of 2022, 32% of Black business owners were not confident in their ability to access capital, compared with 19% not confident overall.

What they’re saying: “Access to capital is a challenge for us. But again, we're optimistic that there are programs that are available,” says Apryl Stewart, president and CEO of Skyview Concessions in California, referring to the support she's received from the SBA and the EIDL loan program.

Zoom out: Since the police killing of George Floyd in 2020, many Black small-business owners saw a surge in support. And while some of that fervor has waned, Stewart sees lasting effects.

"I've had customers come back … once they discovered we're a small business and women and minority-owned business. So that makes me feel really, really great and optimistic about what the future could hold.”

What to watch: Inflation and the tight job market remain barriers.

Allison Dunn, who opened Hibiscus Brew Cafe in Brooklyn in 2020, is more pessimistic about this year. She says she can only raise prices so much before she moves herself out of competition for customers.

“I'll be charging way above the market rate and no one will pay for that," she tells Axios.

Methodology: This data is based on a survey of 1,838 Goldman Sachs 10,000 Small Businesses participants, including 325 Black small-business owners, conducted by Babson College and David Binder Research from January 23 – 26, 2023. The survey included small business owners from 48 U.S. states. 

Survey: Black small-business owners more confident about this year than their peers

More than 80% are optimistic about their financial trajectory this year, according to Goldman Sachs' latest 10,000 Small Businesses Voices survey.

Small businesses

Black small-business owners feel more optimistic about this year than their peers, Goldman Sachs&#x27; latest <a class="gtmContentClick" data-vars-link-text="10,000 Small Businesses Voices" data-vars-click-url="https://www.goldmansachs.com/citizenship/10000-small-businesses/US/infographics/february-2023/index.html" data-vars-content-id="7618cd4b-586b-4da0-8a62-2b4773d6d74f" data-vars-headline="Survey: Black small-business owners more confident about this year than their peers" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.goldmansachs.com/citizenship/10000-small-businesses/US/infographics/february-2023/index.html" target="_blank">10,000 Small Businesses Voices</a> survey shows.Why it matters: Despite higher operating costs and systemically greater financing obstacles, some Black small-business owners surveyed in late January say they’ve emerged from the last few years more confident in their ability to manage through challenges and that they see more growth opportunities than they have in the past.

The echo of "pandemic paranoia" is one factor preventing many of us from seeing what’s strong about the U.S. economy right now.

Why it matters: By many measures, it's booming. But business leaders have issued serious warnings and thrown up yellow flags, while consumers repeatedly signal growing pessimism.

State of play: Jobs are growing at a bonkers pace, unemployment is ultra-low; 70% of earnings have been better than expected; inflation is high, but slowing down; and travel, dining out and event planning are soaring. 

The intrigue: "Everyone's anticipating a slowdown, but hadn't seen proof of a slowdown yet," Becky Frankiewicz, president and chief commercial officer of ManpowerGroup NA, tells Axios.

"Employers are still recovering from the emotion and the stress" of trying to grow their businesses as the world shut down.

Context: The severity of the global health crisis has had such a deep impact on our psyche that it's clouding the way we see reality, making us more fearful and less trusting of people and information, experts told CNN in 2021.

Fear shows up in sentiment from CEOs to consumers, too, despite how much our own behaviors contradict our moods. 

Today, workers still hold the upper hand because they hold the keys to where labor is most needed and wages favor turnover, Frankiewicz says. 

"The quit rate hasn't dropped below 4 million in 19 months," she says, while the average increase in salary is 15% if someone jumps ship versus 7% if they stay.

"The American worker is still confident ... and it goes back to how much they were in demand during the crisis."

The big picture: There are still plenty of worrying signs on the horizon that warrant monitoring.

Savings rates have plunged, credit card usage has jumped and excess savings stored up from stimulus checks and stay-at-home lifestyles are shrinking.

But, coupled with a labor market that isn't following "a traditional playbook for a slowdown," the economy is becoming increasingly difficult to predict and that feeds into negative anticipation, Frankiewicz notes.

What to watch: News of tech layoffs have dominated the headlines.

That's because as companies like Salesforce and Microsoft hired so massively during the pandemic, they became the "media weathervane for economic growth," Frankiewicz says.

The unpredictable consumer frustrates forecasting

Walmart raising wages for hourly U.S. workers

The echo from "Pandemic paranoia" is one factor preventing many of us from feeling like the U.S. economy is, by many measures, booming.

Illustration of the sun shining through coronavirus-shaped clouds.

The echo of &quot;pandemic paranoia&quot; is one factor preventing many of us from seeing what’s strong about the U.S. economy right now.Why it matters: By many measures, it&#x27;s booming. But business leaders have issued <a class="gtmContentClick" data-vars-link-text="serious warnings" data-vars-click-url="https://www.cnbc.com/2022/10/19/amazon-founder-jeff-bezos-warns-its-time-to-batten-down-the-hatches.html" data-vars-content-id="bcd14e32-bbb8-4483-8ba5-f64bb7e312cc" data-vars-headline="&quot;Pandemic paranoia&quot; clouds economic reality" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.cnbc.com/2022/10/19/amazon-founder-jeff-bezos-warns-its-time-to-batten-down-the-hatches.html" target="_blank">serious warnings</a> and thrown up <a class="gtmContentClick" data-vars-link-text="yellow flags" data-vars-click-url="https://www.axios.com/2022/06/14/ceo-confidence-falls-recession" data-vars-content-id="bcd14e32-bbb8-4483-8ba5-f64bb7e312cc" data-vars-headline="&quot;Pandemic paranoia&quot; clouds economic reality" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/2022/06/14/ceo-confidence-falls-recession" target="_self">yellow flags</a>, while consumers repeatedly signal <a class="gtmContentClick" data-vars-link-text="growing pessimism" data-vars-click-url="https://www.conference-board.org/topics/consumer-confidence" data-vars-content-id="bcd14e32-bbb8-4483-8ba5-f64bb7e312cc" data-vars-headline="&quot;Pandemic paranoia&quot; clouds economic reality" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.conference-board.org/topics/consumer-confidence" target="_blank">growing pessimism</a>.

Hope King

Stories

Affirm slashes 19% of jobs

Uber CEO: We see no signs of consumer weakness

Zoom laying off 15% of workforce

Survey: Black small-business owners more confident about this year than their peers

"Pandemic paranoia" clouds economic reality