The Week in Business: Southwest’s Holiday Meltdown
What’s Up? (Dec. 25-31)
Stranded at the Airportcanlı casino
Thousands of travelers were stranded in airports across the country over the holidays as Southwest Airlines canceled more than 2,900 flights on Monday and roughly 5,000 over Tuesday and Wednesday, more than 60 percent of its schedule. The disruptions were the result of staffing shortages and longstanding technological problems compounded by a fierce winter storm. Many customers said Southwest had done little or nothing to get them to their destinations. The airline’s chief executive of 10 months, Bob Jordan, apologized, and the company said it had called on over 1,000 corporate employees to manually schedule crews for new flights. But Southwest’s reputation is in tatters, and the scale of the chaos — which one industry analyst called “the worst round of cancellations for any single airline” in recent memory — has prompted the Department of Transportation to announce that it would look into whether Southwest was meeting its obligations to customers.
A Bare-Bones Twitter
As part of a series of drastic cost-cutting measures, on Christmas Eve Elon Musk sent members of his staff to a data center in Sacramento, one of Twitter’s three main computing storage facilities, to disconnect servers key to keeping the site running smoothly. (And many users seemed to notice.) The company is facing eviction from its Seattle office and has cut security and janitorial services at others, with some employees bringing their own toilet paper to the increasingly bare-bones operation. Mr. Musk has also continued to conduct smaller-scale layoffs after the mass job cuts he carried out when he first took over the company in late October: He now says there are about 2,000 people working for Twitter, far fewer than the 7,500 he started with. And workers expect still more layoffs as the company faces a depressed advertising environment and increased costs, like the debt payments from Mr. Musk’s purchase.
Accusations Against JPMorgan Chase
The attorney general of the U.S. Virgin Islands has filed a lawsuit against JPMorgan Chase, accusing the bank of helping to conceal the exploitation of women and girls by the convicted financier Jeffrey Epstein and continuing to provide him with banking services after he pleaded guilty to sex charges in 2008. Mr. Epstein had been a client of the bank’s for 15 years, including for five after his conviction; the bank ejected him in 2013. The suit, filed on Tuesday in federal court in Manhattan, described JPMorgan as “indispensable to the operation and concealment of the Epstein trafficking enterprise,” arguing that the bank’s delay in cutting ties with Mr. Epstein helped enable his sexual abuse. The legal filing originated in the Virgin Islands because of Mr. Epstein’s illegal activities at a villa on an island in the territory, Little St. James Island, which he owned.
What’s Next? (Jan. 1-7)
New Year, New S&P?
We may be able to make resolutions for more positive habits in the new year. But will the stock markets follow suit? After a tumultuous year that was its worst annual performance since 2008, some analysts believe things will start to look up for the S&P 500 in 2023. But predictions, perhaps predictably, are mixed. Some forecast a serious downturn on the horizon, while others feel optimistic that markets will lift as a result of a pivot from the Federal Reserve, which has aggressively raised rates in 2022 but could begin slowing down as inflation continues to moderate. According to Bloomberg, the average forecast for the index is that it will end the year at 4,009, which is the most bearish outlook in more than two decades. But the range of predictions — from a low of 3,400 to a high of 4,500 — represents an unusually wide gulf in opinion.
Incentives for E.V. Drivers
A law that takes effect Sunday will both expand and scramble the list of electric vehicles eligible for federal tax credits, including models from Ford Motor, Nissan, Volkswagen, Tesla and Volvo. Under the legislation, which is part of the climate and energy package that was approved by Congress in August, drivers of those and other eligible vehicles qualify for up to $7,500 in the credits. But auto industry representatives have said that the law, meant to give incentives to companies to make battery-powered vehicles and customers to buy them, comes with too many strings attached. Also confusing: Other parts of the legislation will not be carried out until March, when the Biden administration intends to add new rules devised to force carmakers to buy batteries and raw materials from domestic suppliers and trade allies.
The Latest Jobs Numbers
The last three consecutive jobs reports have been in close range. Employers added 263,000 jobs in September, 261,000 in October and 263,000 in November, a sign that despite a considerable drop-off since earlier in the year, the labor market is still strong. So far, it’s been more resistant to the Fed’s efforts to slow down the economy than officials would like. But on Friday, the latest data from the Labor Department could show that the Fed is starting to make a bigger dent in the jobs numbers, with analysts forecasting 200,000 new jobs in December. The Fed is aiming for a target of 100,000 jobs added per month.
What Else?
Employees at Google have so far escaped the mass layoffs sweeping the tech industry, but they are bracing for cuts. After President Biden helped impose a contract on railroad workers, some union leaders called into question his claims of being the “most pro-union president.” Brian X. Chen, The Times’s consumer tech columnist, predicts virtual reality and A.I. tools will become more entrenched in 2023.
