Good morning! Moving to a new city is hard enough, let alone with a couple of young kids. But a stay-at-home mom told BI her children were the key to making friends in a Houston suburb. It’s the final story in a BI series that followed three people for a year to understand the realities of relocating your life.
You can also read about a woman who was paid to move from Los Angeles to Georgia and a couple who changed coasts when one of them got into Harvard.
In today’s big story, Amazon’s massive layoffs have people nervous about widespread culling in the white-collar workforce. How realistic are those fears? (And is AI really to blame for all of this?)
I’m also hosting a live discussion on that very topic at 2 pm EST on YouTube. I’ll be joined by our resident Amazon expert Eugene Kim and our workplace whiz Aki Ito. More details here. And if you have questions you want answered, shoot me an email here.
What’s on deck:
Markets: The stock market usually loves November. Here’s where to put your cash.
Tech: Big Tech’s AI spending knows no limit.
Business: Who is in, and who is out, on Elon Musk’s $1 trillion pay package.
But first, is that a canary?
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The big story
Job market juxtaposition
Kyle Mazza/NurPhoto via Reuters
First came Amazon. Then came …?
The dust is settling on the meteor-sized layoffs that hit Amazon this week. But concerns are already growing about another deep impact that could hit a wider swath of the white-collar workforce.
As brutal as Amazon’s 14,000 job cuts were, they don’t make that much of a dent in the broader labor market, or even the tech giant’s wider workforce that’s roughly 1.6 million strong.
But if Amazon opened the door for other companies to conduct layoffs of their own, some fear things could get ugly.
So what would it take? About 20 more Amazon-sized layoffs would send the labor market off the rails, writes BI’s Bartie Scott, Andy Kiersz, and Madison Hoff.
That might feel a long way away, and in many ways it is, but it’s also not out of the realm of possibility. After all, companies are known to follow the lead of their bigger peers.
In late 2022, Meta cut 11,000 jobs to kick off its “Year of Efficiency” in 2023. The rest of corporate America took notes, and eventually, some 250,000 people were affected.
Further complicating matters is the current lack of hiring. The “Great Freeze” has kept companies in a holding pattern, refraining from hiring or firing. But if companies start letting people go without replacing them, the somewhat resilient job market could start to show some real cracks.
I know what you’re thinking: Curse you, artificial intelligence!!
AI has been the lead suspect following the autopsy of Amazon’s recent cuts. I include myself in that group, as I wrote about the potential for an AI-led job apocalypse in yesterday’s newsletter.
But there’s a counter-narrative to the AI-took-our-jobs take. As BI’s Peter Kafka asks: Are we sure we’re losing jobs to AI?
Companies typically need to cite some reason for laying off thousands of employees. And since AI is the topic du jour that tech is now banking on, it’s an easy scapegoat.
What’s the alternative? Executives acknowledge that they messed up? They admit they overhired when business was booming, and now they’re being forced to adjust?
“I see this as mainly a correction to pandemic-era dynamics rather than some new thing like AI that’s striking these companies,” Ernie Tedeschi, a nonresident senior fellow at The Budget Lab at Yale, told Business Insider.
Yea, I’d go with the AI excuse, too.
3 things in markets
1. Amazon’s stock consistently finished last in its Magnificent 7 cohort. Over the past five years, the retail giant’s shares have been up 43%, but that’s compared to Nvidia’s 1,521% gain. And even trails the wider S&P 500. Meanwhile, investors are concerned Amazon is being outdone in the AI arms race.
2. The Fed cut rates for the second time this year. As anticipated, the central bank made a quarter-percent rate cut. On the plus side, borrowers could start feeling the relief. On the downside, Fed Chair Jerome Powell said there are no guarantees another rate cut will come in 2025.
3. It’s the most wonderful time … for stocks. November is historically the stock market’s best month — and the odds are looking in favor of that this year, too. Bank of America shared its ideas for where to invest, based on
3 things in tech
Kent Nishimura/Reuters
1. Five trillion reasons to smile. Nvidia became the first company to reach a $5 trillion market capitalization on Wednesday, in part because of how much it’s spending on data centers. It’s the cherry on top of a very good week for CEO Jensen Huang, who saw his personal wealth increase by more than $17 billion.
2. Meta stock slides despite earnings beat. The stock plunged 9% in after-hours trading after Mark Zuckerberg’s company reported that it paid a $16 billion one-time tax charge this quarter. It beat Wall Street’s expectations but missed on earnings per share.
3. Talk of an AI bubble isn’t slowing Big Tech. Google, Meta, and Microsoft all reported increased spending on AI infrastructure on Wednesday, raising guidance and signaling even higher investments in data centers and chips through 2026. Some investors, meanwhile, are debating whether the AI boom has become a bubble.
3 things in business
Getty Images; Tyler Le/BI
1. The boomer property tax revolt. Home values have skyrocketed, and property taxes have risen with them. Older Americans are sick of it — but eliminating property taxes would hurt millennials and Gen Z, who rely on the local services they fund.
2. Who’s for and against Elon Musk’s $1 trillion payday. Tesla shareholders are set to vote next week on the compensation plan that could potentially make Musk the world’s first trillionaire. Here’s where major shareholders like Cathie Wood, Wedbush Securities, and the New York State Retirement Fund stand on the proposal.
3. Protein is helping Starbucks bulk up its comeback. CEO Brian Niccol said offerings like protein cold foam and protein lattes were helping to drive turnaround efforts at the coffee chain. As a result, gains-minded rewards-program members are getting in the door more often.
In other news
What’s happening today
Amazon and Apple report earnings.Bureau of Economic Analysis publishes Q3 growth figures.
Dan DeFrancesco, deputy executive editor and anchor, in New York. Hallam Bullock, senior editor, in London. Akin Oyedele, deputy editor, in New York. Grace Lett, editor, in New York. Amanda Yen, associate editor, in New York.
