Business briefs
By NewsPress Now
Vice Media says ‘several hundred’ staff members will be laid off
NEW YORK | Vice Media plans to lay off several hundred employees and no longer publish material on its Vice.com website, the company’s CEO said in a memo to staff Thursday.
Vice, which filed for bankruptcy last year before being sold for $350 million to a consortium led by the Fortress Investment Group, is also looking to sell its Refinery 29 publishing business, CEO Bruce Dixon said in his memo to staff.
It’s the latest sign of financial problems buffeting the media industry. Digital sites the Messenger, BuzzFeed News and Jezebel have all shut down in the past year, and legacy media outlets like the Los Angeles Times, Washington Post and Wall Street Journal have also seen job cuts.
Once a swashbuckling media company geared to a younger audience with an immersive storytelling style that encompassed digital, television and film outlets, New York-based Vice was valued at $5.7 billion in 2017.
Dixon offered no specifics about the layoffs, other than saying hundreds of people will be affected and will be notified early next week. The New York Times reported that the company currently has about 900 people on staff.
“I know that saying goodbye to our valued colleagues is difficult and feels overwhelming, but this is the best path forward for Vice as we position the company for long-term creative and financial success,” Dixon said.
He said it was no longer cost-effective for Vice to distribute its digital content, including news, the way it has been. He said Vice would put more emphasis on its social channels and look for different ways to distribute its content.
As part of its strategic shift, Dixon said Vice would follow a studio model.
Before filing for bankruptcy protection last year, Vice canceled its “Vice News Tonight” television program as part of a round of layoffs then.
Volkswagen to recall 261,000 cars to fix pump problem
DETROIT | Volkswagen is recalling more than 261,000 cars in the U.S. to fix a potential fuel leak that can increase the risk of fires.
The recall covers certain Audi A3s and VW Golfs and GTIs from the 2015 through 2020 model years. Also included are 2015 through 2019 Golf Sportwagens, and 2019 and 2020 VW Jettas. All the recalled cars have front-wheel drive.
VW says in documents posted Thursday by the U.S. National Highway Traffic Safety Administration that a problem with a pump seal can let fuel leak from a charcoal canister in the emissions control system. The agency says leaking fuel increases the risk of a fire.
Dealers will replace the pump, which is inside the fuel tank, at no cost to owners. VW will send out notification letters starting April 12.
The recall is the second for many of the car owners. VW recalled about 110,000 cars for the same problem in 2016, but the company found that the replacement pumps from the previous recall also were failing.
U.S. safety regulators opened an investigation into the problem last year after getting 79 complaints of fuel leaks from owners.
VW said in documents that it had 1,410 warranty claims with repair dates from May of 2016 through December of last year. The documents say no fires related to the problem have been identified.
Applications for U.S. jobless benefits fall again
The number of Americans applying for jobless benefits fell to its lowest level in five weeks, even as more high-profile companies announce layoffs.
Applications for unemployment benefits fell by 12,000 to 201,000 for the week ending Feb. 17, the Labor Department reported Thursday.
The four-week average of claims, a less volatile measure, fell by 3,500 to 215,250, down from 218,750 the previous week.
Weekly unemployment claims are broadly viewed as representative of the number of U.S. layoffs in a given week. They have remained at historically low levels in recent years, despite efforts by the U.S. Federal Reserve to cool the economy.
The Federal Reserve raised its benchmark borrowing rate 11 times beginning in March of 2022 in an effort to bring down the four-decade high inflation that took hold after the economy roared back from the COVID-19 recession of 2020.
Many economists expected the rapid rate hikes to weaken the labor market and potentially tip the country into recession, but it hasn’t happened. Jobs have remained plentiful and the economy has held up better than forecast thanks to strong consumer spending.
U.S. employers delivered a stunning burst of hiring to begin 2024, adding 353,000 jobs in January in the latest sign of the economy’s continuing ability to shrug off the highest interest rates in two decades.
Last month’s job gain — roughly twice what economists had predicted — topped the December gain of 333,000, a figure that was revised sharply higher. The unemployment rate stayed at 3.7%, and has been below 4% for 24 straight months — two full years — the longest such streak since the 1960s.
Though layoffs remain at low levels, there has been an uptick in job cuts recently across technology and media. Google parent company Alphabet, eBay, TikTok, Snap and the Los Angeles Times have all recently announced layoffs. Last week, Cisco Systems announced it was cutting 4,000 jobs.
Outside of tech and media, UPS, Macy’s and Levi’s also recently cut jobs.
In total, 1.86 million Americans were collecting jobless benefits during the week that ended Feb. 10, a decrease of 27,000 from the previous week.
Though inflation has eased considerably in the past year, the Labor Department reported last week that consumer prices remain well above the Fed’s 2% target.
The Fed has left rates unchanged at its last four meetings.
Home sales rose in January as easing mortgage rates enticed homebuyers
LOS ANGELES | Sales of previously occupied U.S. homes rose in January as homebuyers were encouraged by easing mortgage rates and a modest pickup in properties on the market.
Existing home sales rose 3.1% last month from December to a seasonally adjusted annual rate of 4 million, the National Association of Realtors said Thursday. That’s the strongest sales pace since August and is slightly higher than the 3.98 million sales pace economists were expecting, according to FactSet.
The modest sales increase is an encouraging start for the housing market, which has been mired in a slump the past two years. Still, compared with January 2023, sales fell 1.7%. Existing home sales sank to a nearly 30-year low last year, tumbling 18.7% from 2022.
“While home sales remain sizably lower than a couple of years ago, January’s monthly gain is the start of more supply and demand,” said Lawrence Yun, the NAR’s chief economist.
The pickup in sales helped push up home prices compared with a year earlier for the seventh month in a row. The national median sales price rose 5.1% from January last year to $379,100. That’s the highest median sales price for January on records going back to 1999.
For the first time in 14 months, the median home sales price outpaced the 4.5% annual gain in U.S. wage growth recorded in January.
“It’s unhealthy, we don’t want to see it, but its a testament to the housing shortage we’re facing in America,” Yun said.
Competition for relatively few homes on the market and elevated mortgage rates have limited house hunters’ buying power on top of years of soaring prices. That dynamic has helped keep home prices mostly rising despite weak home sales.
The cost of financing a home has largely come down from its most recent peak in late October, when the average rate on a 30-year mortgage hit a 23-year high of 7.79%, according to mortgage buyer Freddie Mac. But rates have been rising in recent weeks, with the average rate climbing this week to 6.90%, the highest level since mid-December.
“This is going to definitely impact the affordability for many people out there in the market place,” Yun said. “So, it’s not good news.”
Homebuyers who could afford to sidestep mortgage rates altogether increasingly did so last month. Some 32% of the homes purchased last month were bought entirely with cash, the highest share in nearly 10 years, Yun noted.
First-time homebuyers who don’t have any home equity to put toward their down payment continued to have a tough time getting into the housing market. They accounted for just 28% of all homes sold last month. They’ve made up 40% of sales historically.
A modest increase in the number of homes on the market helped lift sales. At the end of December, there were 1.01 million homes on the market, the NAR said. While that’s a 3.1% increase from a year earlier, the number of available homes remains well below the monthly historical average of about 2.25 million.
The available inventory at the end of January amounted to a 3-month supply, going by the current sales pace. That’s up 2% from the previous month and 3.1% January last year. In a more balanced market between buyers and sellers, there is a 4- to 6-month supply.
While more homes typically hit the market in the spring, many homeowners that have locked in a mortgage rate well below where rates are today may opt to stay put rather than give up their rock-bottom rates. Some two-thirds of U.S. homes have a mortgage with a rate under 4% and more than 90% have a rate below 6%.
—From AP reports
