(BOSTON) — Online home goods retailer Wayfair is laying off nearly 900 workers worldwide, which amounts to 5% of the company’s workforce, the company said in a memo to employees on Friday. The cuts include about 400 jobs in Boston, where Wayfair is headquartered, the company said.
Wayfair saw business surge during the pandemic, as people stuck at home eschewed brick-and-mortar shopping and increased spending on furniture, home renovations, and other domestic improvements. But the economic environment has turned against the company, as inflation has strained household budgets and limited nonessential purchases.
“We were seeing the tailwinds of the pandemic accelerate the adoption of ecommerce shopping, and I personally pushed hard to hire a strong team to support that growth,” Niraj Shah, the founder and CEO of Wayfair, said in the memo. “This year, that growth has not materialized as we had anticipated.”
Laid-off employees will receive severance based on geography, tenure and level, Wayfair said. The company is offering U.S.-based employees a minimum of 10 weeks pay, as well as continued vesting of existing equity through October, the company added.
Wayfair instituted a hiring freeze in May, signaling that its near-term outlook had changed. In total, the company has 18,000 employees.
In early trading on Friday morning, the company’s stock fell more than 10%.
“We are actively navigating Wayfair towards a level of profitability that will allow us to control our own destiny, while still investing aggressively in the future,” Shah, the CEO of Wayfair, said.
“This macro environment doesn’t change our belief in the size of the opportunity ahead, and we are moving purposefully to seize that opportunity,” he added.
(BENTONVILLE, Ark.) — Walmart, the Arkansas-based retail giant known more for value than flare, made a splash in Hollywood this week upon the announcement of a deal with streaming service Paramount+.
The retailer will provide the video content free of charge to Walmart+ subscribers, who pay $98 a year or $12.95 a month for a membership package that includes gas discounts, free two-day shipping on online purchases, and member-only deals, the company said in a statement on Monday.
The move marks a major departure for Walmart, which appears to have weathered sky-high inflation with better-than-expected earnings in the second quarter, as revenue climbed 8.4% compared to the same three-month period a year prior. However, the company had cut its second-quarter forecast just weeks earlier.
The new streaming content will help the retailer retain current Walmart+ subscribers and attract new ones, as the company vies with rival Amazon and continues to grow beyond its telltale big box stores with an e-commerce offering that gained emphasis during the pandemic, retail analysts told ABC News.
While the move highlights the digital value of Walmart’s subscription service, the company’s effort to improve the in-store experience exclusive to subscribers could translate the potential influx of members into more brick-and-mortar business, they added.
An assessment of the deal with Paramount+ — and its capacity to strengthen Walmart’s subscription service — should take into account the customer base that the company has already built, Steph Wissink, a retail analyst at Jefferies, told ABC News. Ninety percent of Americans shop at Walmart each year, the company said in March, adding that more than 150 million people shop with the company each week either in-store or online.
As Walmart strengthens its subscription service, that customer base affords it a wide pool of prospective members, enhancing the potential value of the Paramount+ offering for the company, Wissink said.
“That touch point element is meaningfully higher than what we would see for other retailers,” she said, acknowledging that “some portion of their household income distribution is not going to be able to afford” the subscription.
By comparison, as of last April, Amazon boasted more than 200 million Amazon Prime subscribers worldwide. Walmart has not released subscriber totals for Walmart+, but the expected figure is much lower, analysts said.
The deal with Paramount+, therefore, comes down to competition with Amazon, Joe Feldman, a retail analyst for Telsey Advisory, told ABC News.
“This is an effort to be more competitive with Amazon as a membership provider,” he said. “You’ve seen both companies increasingly compete with one another and almost mirror one another.”
The entry of Walmart into streaming parallels Amazon’s decision to jump into the in-store grocery business that Walmart had participated in for years, Feldman said.
Even though brick-and-mortar shopping has bounced back since the early months of the pandemic, e-commerce remains a key focus for Walmart, Wissink, said.
“Digital fluency went up substantially in 2020 because stores were closed,” she said. “Even your granny was ordering things online and having them delivered to the front door.”
But the focus on Walmart’s subscription service, brought to the attention of many by the partnership with Paramount+, also points to an advantage for Walmart that sets it apart from Amazon: the vast network of stores, Wissink said. Down the road, if Walmart improves the subscription service with further in-store benefits, it could compound the revenue from new digital subscribers with enticements for in-store shopping.
“Let’s say it’s my birthday and I go to Walmart, Walmart+ on mobile can prompt me with a free coffee or free cupcake at the bakery,” Wissink said. “Those are benefits for a Walmart+ member.”
“The partnership with Paramount+ isn’t a signal that Walmart thinks its stores are no longer relevant,” she added. “It’s the exact opposite.”
Looking ahead, Walmart could even form partnerships with additional streaming services to improve its subscription offering, Feldman and Wissink said.
“Walmart is likely to explore lots of different options,” Feldman said.
(WASHINGTON) –The Inflation Reduction Act, a $739 billion measure signed into law by President Joe Biden on Tuesday, levies a 15% minimum tax on large corporations and marks the most significant climate legislation in U.S. history. Meanwhile, the law will reduce the federal deficit by $305 billion over roughly the next decade, according to the nonpartisan Congressional Budget Office.
More immediately, however, the legislation will impact everyday Americans’ wallets.
The law, which passed the House and Senate with support from Democrats in party-line votes, empowers a federal agency to negotiate with health insurers over the prices for prescription drugs under Medicare, for instance, which should bring down the cost of some drugs for seniors.
Further, the measure puts a ceiling on out-of-pocket costs at $2,000 beginning in 2025 for people enrolled in Medicare Part D, the prescription drug plan for seniors.
Beyond health care, the Inflation Reduction Act carries a host of tax credits and discounts on everything from electric cars to solar energy.
Americans can determine the financial benefits available to them under the law with help from a savings calculator created by Rewiring America, a nonprofit that aims to achieve energy efficiency through the electrification of “everything in our communities.” After entering personal information about the location, size, and income of a given household, the calculator will share all of the savings accessible through the measure.
(NEW YORK) — Award-winning restaurateur Michael Scelfo has run kitchens post-9/11 and through the 2008 economic downturn, but he said the COVID-19 pandemic and soaring inflation have brought on prolonged issues businesses are still trying to figure out.
“What’s so different this time around is it’s this sustained, evolving-downward spiral since March of 2020 when things hit the fan with COVID and the shutdown,” Scelfo told Good Morning America. “What we’re left with is the economic rubble of the aftermath.”
Restaurant owners are accustomed to dynamic changes, but even industry veterans like Scelfo said, “it feels like we’re continually taking punches and not necessarily getting the relief that we expected.”
And problems that began at the onset of the pandemic — mandated restaurant closures, safety restrictions, staffing shortages and broken supply chains — have been exacerbated by rising costs on food, fuel and materials, failed federal relief packages and inflation, experts said.
Soaring inflation hits cost of ingredients
Food prices have outpaced the overall inflation rate, which is up nearly 11% year-over-year in July, according to the latest data from Bureau of Labor Statistics. Common restaurant staple ingredients like flour — when purchased in a U.S. city — rose 22% in the last year, while eggs have increased 38%.
“It all trickles down to what the baseline cost of whatever the product is,” Scelfo said. “If you’re paying more for it on the home front, you can be assured that we’re paying more.”
Scelfo, who has not passed along increases to his guests, looks at that as a last resort.
“I don’t want to raise prices on the consumer any more than I have to because I’m sensitive to it too. And I do think there’s a limit to what you can realistically charge,” he said. “If you’re a restaurant that’s operating on thin margins, you’re really probably up against it right now — there’s kind of this feast or famine out there for restaurants who have the means to navigate this period.”
“Inflation is having a tremendous impact on everyone across the board,” Leslie Silverglide, co-founder of California casual restaurant chains Split and Mixt, told GMA. “[We’ve tried to] hold price as much as possible,” she added, and “be smarter about how we run our business.”
Food shortages, costs impact menus and availability
Brooklyn-based chef-owner Sal Lamboglia of the newly opened Italian hotspot, Cafe Spaghetti, thinks customers may relate more than ever to the challenges of rising food costs as they shift their own spending on groceries.
“So many things that we use that aren’t even specialty items — eggs, milk, cream, butter – have gone up 10, 20 30% — I’m sure every restaurant is going through this, but I also feel also for the diner,” he said. “It’s scary because I don’t know if things will make their way down again.”
And he said Lamboglia’s menu has taken a hit.
“We’ve been getting shorted on certain pastas, and certain grains and flour — I’ve had to actually change a brand of pasta,” he said. “[We] go back to the drawing board each time and say, ‘OK, how valuable is this dish with this exact pasta? Can we change the shape? Are people going to like it? And that’s what we deal with now. It’s a lot.”
Chef David Nayfeld, owner of Che Fico and Independent Restaurant Coalition (IRC) board member, told GMA that some think inflation is “just now happening.” “Our costs have been rising steadily and aggressively for nearly two years,” he said.
“We’ve decided to actually lean into quality,” Nayfeld said. “It may mean that people will dine out less,” but he believes diners will choose restaurants “based on quality.”
He also hopes the decision to spend more on employees, products and farms will ensure the support of key players who share his values to “offer a better quality of product to our guests, knowing that they’re smart enough to know the difference.”
Paying for quality labor impacts every facet of the supply chain: “If nobody is there to support and prop the supply chain up, [it] will collapse,” he said. … when we believe in product and believe in farms — we need to support them.”
New strategies to stay afloat
Jake Dickson, owner of Dickson’s Farmstand Meats — a butchery, restaurant and bar — called “huge increases in labor costs, packaging costs and meat inputs” a “triple whammy” over the last six months.
“Our labor costs per head were up 30%,” he told GMA of the overhead and “first punch” at the start of the pandemic. “And that’s pretty tough in a business where labor costs are already massive.”
Where Dickson was initially “insulated from food cost increases” and able to keep meat prices steady thanks to longstanding relationships with purveyors, he said “unfortunately, those things don’t hold right now.”
“Our farmers’ costs are now going through the roof,” he said, noting fertilizer and fuel costs have prompted higher prices.
“They don’t want to increase prices on us because they don’t want me to buy less and they know that if I raise my prices, we’ll probably sell less,” Dickson said.
Four months ago, he made a “very purposeful decision to add a beer and wine license,” opening a bar that serves as “a high margin business” to offset other new costs.
“We’ve kept either small increases or no increases in many places because the bar’s margins are so much higher,” he said, hailing it “a bulwark.”
He also strategized his labor costs.
“Now they’re pretty much flat because we made a choice to pay our employees really well then and we haven’t had to keep giving raises — we’re very competitive — now we’re just kind of figuring out all the other pieces.”
Adapting to skyrocketing expenses
In 17 years of opening restaurants across California, Texas and Arizona, Silverglide said her growing list of challenges has been unlike any other.
“We joke that it’s like Whac-A-Mole. We solve one thing, then something else pops up,” she said. “Especially as we’re looking to build out new restaurants, we’re finding it really hard to just get standard equipment — we place the orders and then as we get closer, they’re like, ‘Oh, actually, it’s gonna be another four to six months.'”
“It’s a hard place to be running a restaurant today,” Silverglide told GMA.
Lamboglia thinks restaurants can strike a balance by offsetting expensive entree lists with a section of the menu that’s affordable.
“At least giving the guests the option not to feel like, ‘Wow, I almost can’t even go out to eat because it’s just too much,” he said.
Rather than constantly revising menu prices as inflation rose to 7% this spring, Leslie Whitney, the owner of Sunset Grill in Virginia, told GMA she and her husband decided on a “temporary fix” to add an “inflation fee” of 3.5% to diners’ checks.
“As food prices were literally rising and changing every day … we had to do something to recoup some of the money loss,” she said. Although the flat fee won’t cover all their new costs, they are “simply trying to stop the bleed.”
Staffing has been one of the “lasting effects of COVID” that Whitney has grappled with.
“We can fluctuate with rising food prices, but not having appropriate staff really puts a wrench in our operations of service — we’re constantly trying to hire where we are short staffed,” she said. “Back-of-the house positions are the hardest to hire because we have high expectations and aren’t willing to cut corners in knowledge and experience.”
A push for federal funding
“The one big player here that has not done enough is the government,” Nayfeld said. “[The government] has had the ability with multiple bills to refill the Restaurant Revitalization Fund, which would really do a tremendous amount – not just for now, but for a couple of years, making sure that these restaurants can stabilize.”
Scelfo, who applied and said he never received money from the bill that was part of the American Rescue Plan, added that the “RRF only funded maybe a third or half of restaurants that applied for it and they’ve still never replenished that.”
Despite the constant battering, resilience has created a resounding sense of gratitude and respect in the industry.
“To look for a positive in all this, I’ve never been more proud of our teams,” Scelfo said of the staff who continuously rises to the occasion.
“Restaurants are continuing to find a way to provide a great customer experience so that they really try to minimize the effect of what’s happening out there and make you feel like you’re escaping it … that’s why I’m trying not to pass along that cost.”
“None of that would be possible without a lot of dedicated people that continue to work in this industry and work harder than they ever had before,” Scelfo said.
(WASHINGTON) — The newer the car, the safer it is for women drivers, the National Highway Traffic Safety Administration said in a new report Tuesday.
While the NHTSA’s earlier report, published in 2013, found women to be at a much higher risk of fatality in car crashes compared to men, the 2022 report said that newer car technology, in line with strengthened regulations, has decreased the disparity.
According to the National Roadway Safety Strategy published by the Department of Transportation in February, officials said that although men represent more than 70 percent of drivers involved in fatal crashes, the motor vehicle fatality risk is still higher for a woman than for a man of the same age.
The NHTSA’s new report states the estimated difference in fatality risk estimates for female versus male front row occupants is 6.3% for car models from 2010-2020. Older vehicles, with model years 1960-2009, have a disparity almost three times that at 18.3%.
For vehicles within model years 2015-2020, the disparity closed even further, coming in at 2.9%, the report said.
Newer generations of cars are equipped with dual air bags, which significantly reduces the fatality risk for women in crashes, the NHTSA said. Newer cars also have more advanced seat belts, the agency said, which further reduces women’s risk.
However, NHTSA’s Administrator, Steven Cliff, said that the department is still looking to improve the impact upon women who are in car crashes.
“Advancing equity, including across our transportation system, is one of the Biden-Harris Administration’s top priorities,” Cliff said in a press release. “While NHTSA’s new report shows significant declines in differences in crash outcomes between women and men, there is more work required to eliminate any disparities that remain.”
The NHTSA said a number of developments are in action to close the remaining gap, including the development of new biofidelic crash test dummies and of sophisticated computer modeling that can evaluate the effects of different types of crashes on a large range of human body types and sizes.
Further, the agency is researching the degree to which sex disparities in injuries exist in like crashes and the evaluation of new safety standards to eliminate all remaining disparities.
Historically, car crash tests used only male dummies, according to the NHTSA. The agency has used a 4 foot 11 inch tall and 108 pound “female dummy” in some tests since 2003, the NHTSA said. However, this sizing is not accurate to the average woman’s body in America.
According to the NHTSA, new federal funding through the major infrastructure bill passed in last year will help accelerate research on this front to further close the gap in fatality rates for men and women in car crashes.
(WASHINGTON) — Air travel fares may be starting to drop from their summer highs, but customers could pay the price to see family and take long-awaited vacations in the post-pandemic world, travel experts say.
Hopper predicts this upcoming winter holiday season will be the most expensive in the last five years.
Hopper anticipates 12.6 million people will fly over Labor Day weekend. Average ticket prices for the long weekend are up 20% from 2021 and 2019.
Domestic flights will cost $278 on average for a round-trip, according to Hopper data. For international flights, customers should expect to pay an average $850 for round-trip fares. International prices are up 34% from 2021 fares.
Nonetheless, Hopper said international travel is expected to make up 40% of the weekend’s air traffic, up 7% from 2021.
The most popular destinations for domestic and international bookings are Las Vegas, Denver, Atlanta, Puerto Rico and Mexico, according to Hopper.
Hotel and gas prices are expected to add further expenses compared to 2021 travel, the agency said.
This Thanksgiving, domestic flights are currently up 31% from 2019 prices and 44% from those in 2021. The average round-trip flight is sitting at $380, a Hopper spokesperson told ABC News.
For those going international, prices aren’t jumping quite as high. Hopper reported a 23% and 25% rise in prices from 2019 and 2021, respectively. The average round-trip price is listed at $788, according to Hopper.
Looking ahead to Christmas travel, Hopper said prices are up 25% and 42% from 2019 and 2021 for domestic bookings, and up 9% and 39% from those same years for international trips.
A Hopper spokesperson told ABC News that the best time to start booking your domestic holiday travel is by mid-September into mid-October. For international trips, start as soon as possible, Hopper said, to book by the first week of October.
Some of the most searched destinations for the holidays are facing these price raises, including New York City, Orlando, Atlanta and Los Angeles, according to Hopper.
London and Paris are the top searched international destinations for both Thanksgiving and Christmas, Hopper said.
The high-priced holiday season comes after a summer of airline disasters, as patrons experienced delays and cancellations at high rates throughout the season as severe weather and staff shortages have defined airports across the country.
Paul Bersebach/MediaNews Group/Orange County Register via Getty Images
(WASHINGTON) — Car buyers hoping to get a tax credit from the government for an electric vehicle after President Joe Biden signs the Inflation Reduction Act into law might find fewer vehicles that qualify.
The Clean Vehicle Credit, a part of the Inflation Reduction Act that passed Congress last week, had a provision that added a credit of up to $4,000 for used EVs. The new law also removes the current 200,000 EV sales cap, which means vehicles made by Tesla, General Motors and Toyota are eligible again for a federal tax credit.
The law also tightens restrictions on which vehicles qualify for the credit. To receive the tax credit, vehicles must be manufactured in North America and made with batteries that have critical components sourced in either North America or supplied by the country’s free-trade agreement partners. The new law also means that high-income buyers and more expensive EVs will not be eligible for the credit.
Of the more than 70 EVs currently on the market, one insider says there’s a possibilitythat no EVs would qualify for a tax credit in the short term.
“When the Inflation Reduction Act is passed and signed by the president, those rules will change and become a lot more restrictive,” said John Boezella, president and CEO of Alliance for Automotive Innovation. “And that’s because the purpose of the credit has changed. It’s now focused on reducing our dependance on China for raw materials and battery components.”
But as manufacturing of EVs and batteries move to the U.S., far more vehicles will qualify for the federal tax credit. Boezella estimates that in five or seven years, there will be as many as 120 EVs on the market that could qualify for the new credit.
“It won’t happen overnight despite the fact that companies are investing billions of dollars right now to develop those supply chains,” Boezella said. “So what you’ll see is a reduction in the number of vehicles that will qualify, and then over time, we would expect that more vehicles will qualify in the future.”
The changes have caused confusion for industry experts, manufacturers and consumers.
“Consumer Reports did a survey and we found that half of car buyers are more likely to purchase an EV if there’s a tax credit that brings down the price, so those tax credits are obviously important to buyers,” said Keith Barry, an auto writer at Consumer Reports. “And if people can’t quite figure out which car qualifies, I imagine that will probably stall sales in the short term.”
Manufacturers, dealers and others in the auto industry are waiting to see what effect the bill will have on EVs.
“There’s a bit of a wait and see,” Barry said. “Different manufacturers are saying different things about what cars will qualify during this sort of transition period. And there’s no one size fits all answer here, unfortunately, until the regulations are fully written and the dust settles.”
(NEW YORK) — The Trump Organization’s longtime chief financial officer, Allen Weisselberg, is expected to plead guilty to tax charges as soon as this week, sources familiar with the matter told ABC News.
Weisselberg, 75, is currently scheduled to go on trial in the fall, but a hearing in the case is now scheduled for this Thursday, in what could be a sign that he could change his plea then.
An attorney for Weisselberg declined to comment when contacted by ABC News.
Weisselberg, along with former President Donald Trump’s namesake family real estate firm, was charged last year with tax fraud after they were accused of compensating employees “off the books” in order to pay less in taxes.
According to the charging documents, Weisselberg avoided taxes on more than $1.7 million over the past 15 years, resulting from the payment of his rent on an apartment in a Trump-owned building and related expenses that prosecutors said included cars and private school tuition for his grandchildren.
The Trump Organization is proceeding to trial, the sources said, with the case currently scheduled to begin toward the end of October.
News of the development was first reported by The New York Times.
It was not immediately clear whether the terms of Weisselberg’s plea would require him to cooperate with the ongoing investigation.
However, sources said Weisselberg is expected to serve some prison time.
Last week, Weisselberg lost his motion to have the indictment against him thrown out.
He is no longer the Trump Organization’s CFO, but remains employed by the firm.
(WASHINGTON) — A frozen food manufacturer issued a recall Sunday for more than 13,000 pounds of frozen meat pizza over possible contamination, the U.S. Department of Agriculture’s Food Safety and Inspection Service said.
Home Run Inn Frozen Foods said the food products “may be contaminated with extraneous materials, specifically metal,” the USDA said.
The company discovered the problem after it received complaints from consumers, according to the USDA.
“There have been no confirmed reports of injuries or adverse reactions due to consumption of these products. Anyone concerned about an injury or illness should contact a health care provider,” the agency said in a statement.
The company said the recall affects its 33.5-ounce cartons containing “Home Run Inn Chicago’s Premium Pizzeria Deluxe Sausage Classic Pizza” with a “best by” date of “12/03/22.” The frozen meat pizzas were produced on June 6, 2022, the USDA said.
The affected products recall bears an establishment number “EST. 18498-A” inside the USDA mark of inspection, according to the agency.
Anyone who purchased these products is urged not to consume them, the USDA said.
(NEW YORK) — As children are heading back to school this month, Kraft Heinz announced a recall on Friday of more than 5,000 cases of Capri Sun due to a possible contamination.
This voluntary recall comes after the company announced the potential contamination affecting approximately 5,760 Capri Sun cases (each case contains about 10 pouches) of its wild cherry flavor. The company said a diluted cleaning solution was inadvertently introduced into a production line at one of its factories.
The “Best When Used By” date on the products is June 25, 2023, according to the company. No other Capri Sun flavors were listed in the recall.
“The issue was discovered after we received several consumer complaints about the taste of the affected product,” Kraft Heinz said in a statement on Friday. “The Company is actively working with retail partners and distributors to remove potentially impacted product from circulation.”
Those who believe they might have the product are advised not to consume it and return the product where it was purchased.
Click here to view the company’s full description of the affected product.
“Consumers can contact Kraft Heinz from 9 a.m. to 6 p.m. Eastern Standard Time, Monday through Friday, at 1-800-280-8252 to see if a product is part of the recall and to receive reimbursement,” Kraft Heinz said in a statement.
