2019年11月18日 星期一

DealBook: WeWork May Lay Off Thousands of People

The beleaguered office space company could announce plans to cut its work force by at least a third as early as this week.
November 18, 2019
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  An Rong Xu for The New York Times
Huge cuts could hit WeWork’s staff
The beleaguered office space company is said to be planning to cut its work force by at least a third in a bid to stabilize its business, Peter Eavis and Mike Isaac of the NYT report.
The company is preparing to cut at least 4,000 jobs, with the layoffs expected to be announced as early as this week, Mr. Eavis and Mr. Isaac write, citing unnamed sources. (One source said the number could reach 5,000 to 6,000.)
• “Under the plan, the company’s core business of subletting office space would lay off 2,000 to 2,500 employees, one of the people said.”
• “An additional 1,000 employees will leave as WeWork sells or closes down noncore businesses, like a private school in Manhattan that WeWork set up.”
• “Additionally, roughly 1,000 building maintenance employees will be transferred to an outside contractor.”
The reductions would be part of a five-year plan to overhaul WeWork, Mr. Eavis and Mr. Isaac report. That could be presented to employees as early as Tuesday,
More: WeWork is reportedly drawing scrutiny from the S.E.C. over whether the company violated financial rules in the run-up to its botched I.P.O.
Today’s DealBook Briefing was written by Andrew Ross Sorkin, Gregory Schmidt and Jamie Condliffe.
A Saudi Aramco oil facility.
A Saudi Aramco oil facility.  Maxim Shemetov/Reuters
Saudi Aramco pares back its valuation
Saudi Aramco yesterday offered more details on the enormous share offering it is planning for next month, writes Stanley Reed in the NYT.
• The share price would be 30 riyals to 32 riyals, or about $8 to $8.50 per share.
• Three billion shares, about 1.5 percent of the company, would be sold.
• The offering sets the value of the company at $1.6 trillion to $1.7 trillion. At the top of the range, the company could raise $26 billion, which could make it the largest I.P.O. ever.
But the valuation would be short of the $2 trillion initially estimated by Crown Prince Mohammed bin Salman.
And at the lower end of the price range, the I.P.O. would come in just below the record $25 billion raised by Alibaba Group in 2014, Bloomberg reports.
Some analysts have expressed concerns. The price range is still “above what we consider a fair price for the company and above what many institutional investors consider a reasonable price,” said Neil Beveridge, a Bernstein analyst. The Saudi central bank has relaxed lending limits to strengthen demand among local investors.
More: The price range shows there is room for the shares to rally when they start trading, analysts say. But the climate concerns around oil make the offering a hard sell.
Trump retreats from a vaping flavor ban
President Trump pulled back from proposed restrictions intended to curb teenage vaping after he was warned of the political fallout among voters, Annie Karni, Maggie Haberman and Sheila Kaplan of the NYT write.
In September, Mr. Trump said he was moving to ban the sale of most flavored e-cigarettes as vaping among young people continued to rise and the industry came under scrutiny for links to severe lung injuries. “We can’t have our kids be so affected,” Mr. Trump said.
But he has been swayed by his advisers, who warned him of political repercussions to any sweeping restrictions.
• “Mr. Trump decided to cancel the administration’s rollout of an announcement, which included a news conference that Alex M. Azar II, the health and human services secretary, was planning to hold on the issue the next day,” Ms. Karni, Ms. Haberman and Ms. Kaplan write.
• “He is concerned about his chances in 2020, and allies working for the vaping industry have told Mr. Trump of battleground state polling of his own voters that showed the issue costing him support.”
• “Mr. Trump has also been under an intense lobbying campaign over the past seven weeks, waged by tobacco and vaping companies, along with conservative organizations, like Americans for Tax Reform, which are opposed to regulatory limits that would affect retailers, small businesses and adult consumers of e-cigarettes.”
Instead, Mr. Trump plans to keep the conversation open, and has said that he plans to meet with “representatives of the vaping industry, together with medical professionals and individual state representatives, to come up with an acceptable solution to the vaping and E-cigarette dilemma.”
Trump is set to extend Huawei’s reprieve
The Trump administration is set to extend a grace period in which U.S. companies can continue doing business with Huawei, Ana Swanson of the NYT reports.
Huawei has been on a blacklist since May, which bans the firm from buying American products without government approval because American officials consider it a national security risk. But the Commerce Department has issued two 90-day reprieves so far that allow companies to continue to do business with Huawei.
The latest reprieve is set to expire today, “but the administration is expected to extend it for a period,” Ms. Swanson notes. It’s unclear how long that reprieve would be, but Reuters reports that it could be for another 90 days.
Huawei’s future “is not technically a part of trade talks between the two countries,” Ms. Swanson notes, but Mr. Trump “has brought Huawei up as a potential bargaining chip in a long-running trade war.” And Chinese negotiators are “likely to view a temporary reprieve as a good will gesture,” she adds.
Boeing 737 Max airplanes grounded in Seattle.
Boeing 737 Max airplanes grounded in Seattle.  Gary He/Reuters
The F.A.A. wants to get hands-on with aircraft development
Federal regulators are exploring an overhaul of how planes are certified in the wake of crashes involving Boeing 737 Max jets, the head of the Federal Aviation Administration told Benjamin Katz and Andy Pasztor of the WSJ.
The F.A.A. and plane makers should have more dialogue over the course of the development of a new jet, said Stephen Dickson, the F.A.A. administrator. This would raise the possibility of the agency’s being involved in the design of a new plane from the outset.
And human factors should be more of a priority in the process of designing jets, he said.
“The proposals for any overhaul are still general and could change once Congress weighs in, as the F.A.A. responds to criticism of the way it approves new aircraft and what some lawmakers see as its too-close relationship with the industry,” Mr. Katz and Mr. Pasztor write.
More: Mr. Dickson released a video on Friday in which he urged agency employees to resist pressure and deliberate carefully while reviewing the Max for its return to service.
Revolving door
Jesse Panuccio, the former third-ranking official at the U.S. Justice Department, has joined Boies Schiller Flexner as a partner.
The speed read
• HP turned down a takeover offer from Xerox, saying that the bid “significantly undervalues” the company, but left the door open for further negotiations. (Reuters)
• Yahoo Japan and the Japanese chat app Line agreed to merge, a deal that includes a $3.1 billion buyout of Line’s minority shareholders. (WSJ)
• In an echo of the past, some start-ups are preparing for a potential downturn by cutting spending and raising money earlier than planned. (NYT)
• Professional football and baseball players are striking deals with private equity to make money from licensing their portrayals in video games and on trading cards. (WSJ)
• The F.B.I. tried to warn Bank of America against an ill-fated leveraged buyout of Constellation Healthcare that was led by the former Blackstone dealmaker Chinh Chu in 2017. (FT)
Trump impeachment inquiry
• Marie Yovanovitch, the former American ambassador to Ukraine, was unsparing on Friday in her criticism of the Trump administration. (NYT)
• Ms. Yovanovitch was asked in her testimony to respond to a mid-hearing Twitter attack from President Trump, a real-time interruption that she called “very intimidating.” (NYT)
Politics and policy
• Prime Minister Boris Johnson of Britain will try to win over business leaders on Brexit with an offer of tax breaks worth about 1 billion pounds, or about $1.3 billion, a year. (FT)
• Michael Bloomberg, the former mayor of New York, reversed his longstanding support of the aggressive “stop-and-frisk” policing strategy, but many may find the apology hard to accept. (NYT)
• Former President Barack Obama urged candidates for the 2020 Democratic presidential nomination not to move too far left in their pursuit of the White House. (WaPo)
• Pete Buttigieg, a candidate for the Democratic presidential nomination, has a surprisingly robust lead in the latest Iowa poll. (NYT)
• The Supreme Court agreed to decide whether Google should have to pay Oracle billions of dollars in a long-running copyright infringement lawsuit over Android. (NYT)
• Facebook still has a fake user problem. About 400 million of them, perhaps. (FT)
• ByteDance, the Chinese company that owns TikTok, reportedly plans to introduce a music streaming service. (FT)
• Why doesn’t the U.S. just copy China’s industrial policies? (Bloomberg Opinion)
Best of the rest
• Union workers approved a contract with Ford Motor, accepting wage increases and other terms nearly identical to the agreement reached with General Motors. (NYT)
• In Detroit’s biggest bet yet on a mass-market future for battery-powered cars, Ford unveiled the Mustang Mach E, an electric S.U.V. (NYT)
• Because of a judge’s math error, Johnson & Johnson will have to pay $465 million, not $572 million, for its role in Oklahoma’s opioid epidemic. (NYT)
• Prince Andrew set out to explain his friendship with the convicted sex offender Jeffrey Epstein in a BBC interview broadcast Saturday night, but it backfired horribly. (NYT)
• In a tweet, Taylor Swift dragged the Carlyle Group into her spat with her record label, pointing to the growing role that private equity plays in show business. (Bloomberg)
• Banks say they are trying to hire and promote women, but upper levels of management don’t seem to show it. (Bloomberg)
• As protests raged across Hong Kong, the city’s High Court struck down a contentious ban on the wearing of face masks in public. (NYT)
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