Everything that matters this morning


Source: Shutterstock

Twitter to introduce higher priced subscription with no ads

Elon Musk has tweeted that Twitter will be introducing a “higher priced” subscription that will have “zero ads”.

“Ads are too frequent on Twitter and too big. Taking steps to address both in coming weeks,” he tweeted on Saturday.

It comes after the company was reportedly hit by a 35% revenue drop in Q4 2022, amid a cutback in spending from advertisers, according to the Information.

Meanwhile reports suggest a 40% drop in revenue year over year, after a Twitter manager told staff revenue was 40% down on Tuesday (17 Jan) compared with a year ago.

Advertising is Twitter’s main source of income, accounting for 90% of 2021’s $5.1bn (£4.1bn) revenue.

READ MORE: Twitter hit by 40% revenue drop amid ad squeeze, say reports

Morrisons introduces fresh price cuts

Following news in early January that Morrisons was investing £16m to cut prices across a range of products, the supermarket has confirmed a second wave of price cuts.

Fresh price cuts will impact 820 products across a range of categories, such as meat, fruits and vegetables and confectionary, alongside household items, as rising costs and food inflation continue to have an impact on consumers.

The cuts in total average around 20%, and Morrisons says the reductions will be locked in for at least two months, according to the Grocer.

Morrisons CEO David Potts says the cuts demonstrate the supermarket chain’s “continued commitment” to doing all it can to help consumers with their grocery shopping costs.

“In addition to the cuts we made to the Savers range at the start of the month and then our fuel promotion, we’re now cutting the price on even more popular products to help make a positive difference to the pockets of our customers,” he adds.

READ MORE: Morrisons launches second wave of January price cuts

Google cuts 12,000 jobs as it faces ‘a different economic reality’

Google
Source: Shutterstock

Alphabet, Google’s parent company, is cutting around 12,000 jobs as it becomes the latest tech giant to announce mass layoffs, following Microsoft, Meta, Amazon and Twitter in recent weeks.

In a company memo on Friday (20 January) CEO Sundar Pichai explained the layoffs, which will impact 6% of Google’s workforce, as he referenced the company’s “dramatic growth” in the last two years. “To match and fuel that growth, we hired for a different economic reality than the one we face today,” he said.

Google is looking to refocus attention on AI, with Pichai calling the company’s investment in it a “huge opportunity”.

“As an almost 25-year-old company, we’re bound to go through difficult economic cycles. These are important moments to sharpen our focus, re-engineer our cost base, and direct our talent and capital to our highest priorities,” he added.

Pichai said the cuts will affect “Alphabet, product areas, functions, levels and regions”, while the impact on the company’s marketing function is not yet known.

Google’s news comes just days after Microsoft announced similar job cuts. Layoffs at Microsoft will amount to around 10,000 jobs, 5% of its workforce.

“We’re living through times of significant change and as I meet with customers and partners, a few things are clear. First, as we saw customers accelerate their digital spend during the pandemic, we’re now seeing them optimise their digital spend to do more with less,” said Microsoft CEO Satya Nadella.

UK consumers spent £110.6bn online in 2022

Following online shopping’s pandemic boom, new figures show online spending was up 42.3% in 2022 against 2019’s figures.

However, UK consumers spent less online in 2022 compared with 2021, with an 8.6% drop, according to the research from Adobe.

While spending took a hit, basket sizes grew from an average of 3.3 items in each online order in 2021, to 4.3 in 2022. Adobe suggests heavy discounting from retailers and consumers searching for deals and offers amid a cost of living crisis is responsible for the drop in spending.

Consumers largely shopped using their mobile devices, with more than half (56.8%) making purchases on smartphones, a 10.9% increase year on year.

“The digital economy remains strong, but to weather the cost of living crisis in 2023, businesses must be mindful of how they price and promote products and services to increasingly cost-conscious consumers,” says Abobe UK’s vice-president and managing director, Suzanne Steele.

UK recession could be worse than expected, says EY

Impending recession in the UK could be twice as bad as previously forecasted, say economic forecasters at EY.

While in October 2022 the business consultancy predicted a 0.3% contraction in gross domestic product (GDP) for 2023, today the company’s forecast suggested a drop of 0.7% this year, followed by 1.9% growth in 2024 and 2.2% in 2025.

“The UK’s economic outlook has become gloomier than forecast in the autumn, and the UK may already be in what has been one of the mostly widely anticipated recessions in living memory,” says EY’s UK chair and managing partner, Hywel Ball.

He adds that while upcoming recession could be worse than previously forecast, that it would not last longer than previous suggestions indicated, calling that the “one silver lining”.

“The economy is still expected to return to growth during the second half of 2023 and has been spared any significant new external shocks in the last three months from energy prices, Covid 19 or geopolitics,” Ball adds, noting that the main economic headwind, inflation, “may be starting to retreat”.

READ MORE: Impending UK recession could be twice as bad as anticipated, say analysts





Source link