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SiriusXM cuts 8% of its workforce as part of a broader reorganization

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Sirius XM is the latest media company to announce a round of layoffs

The car radio subscription company, known for its commercial-free music and talk radio channels, said Monday it is cutting 8% of its workforce, or 475 jobs.

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“We are entering into a new phase for our Company,” CEO Jennifer Witz said in an email to employees on Monday. “The investments we are making in the business this year, coupled with today’s uncertain economic environment, require us to think differently about how our organization is structured.”

Shares of SiriusXM hit a new 52-week low Monday.

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In November, the CEO had told the company that as part of their 2023 plans there would be a review of the company. Witz said in the memo Monday that the company has also reduced content and marketing spending, decreased its real estate footprint and also put tighter restrictions on travel and entertainment expenses.

“However, today’s decision to reduce our workforce was required in order for us to maintain a sustainably profitable company,” Witz said.

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Layoffs have been occurring across the media and technology industry in recent months as companies face macroeconomic challenges and brace for a possible recession.

SiriusXM, which is backed by John Malone’s Liberty Media, has been particularly affected by lower automotive sales, as satellite radio subscriptions often come with new cars. The company said it had 32.4 million self-paying subscribers at the end of 2022, but ended the fourth quarter at 6.8 million trial subscribers, down about 224,000 from the prior quarter.

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However, the monthly rate of customers cutting their subscriptions stood at 1.5% during the quarter, remaining “at record low levels.”

Read the full memo here:

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From: Jennifer Witz
Date: Monday, March 6, 2023 at 7:58 AM
Subject: Important Company Update

Good Morning,

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I have some difficult news to share. After a review of our business, we have made the decision to reduce the size of our workforce by 475 roles, or 8%. Unfortunately, this will mean saying goodbye to talented colleagues across the organization.

Over the course of the day today, impacted employees will begin receiving invitations to join meetings with their respective leader and a member of our People + Culture team. 

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I want to acknowledge that this is going to be a challenging day, especially for those departing from the Company, and I’d like to extend my deepest gratitude to everyone for their contributions to SiriusXM. Regardless of the team, level, or tenure, you played a role in bringing our Company to where it is today and for that we are grateful. This was not an easy decision to make, nor one we took lightly. However, it is critical for us to take the right steps now to secure the long-term health and profitability of our business.

How did we get here?
We are entering into a new phase for our Company. The investments we are making in the business this year, coupled with today’s uncertain economic environment, require us to think differently about how our organization is structured. As I shared in November, our planning process for 2023 included an enterprise-wide review of our business to identify opportunities for greater agility and efficiency. As part of this effort, we identified areas in which we could limit discretionary spending to minimize the impact of any additional needs for staff reductions. We streamlined our non-headcount costs by reducing content and marketing spend, decreasing our real estate footprint, and most recently, implementing tighter restrictions in our Travel and Entertainment policy. However, today’s decision to reduce our workforce was required in order for us to maintain a sustainably profitable company.

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Who is impacted? 
Over the past five years, our business has grown and expanded with the addition of new acquisitions, business lines, and revenue streams. Now, we have completed an assessment of our departments and functions to determine where we can improve collaboration, consolidate teams to achieve greater efficiencies, and ultimately, design an organization structure that is best positioned to achieve our priorities. As a result, nearly every department across SiriusXM will be impacted. We believe the new operational design will allow us to move faster and more effectively as we take on new challenges across our business.

What’s next?
For those leaving us, you will be contacted directly regarding your departure, and you will have the opportunity to speak with a leader from your department as well as a member of our People + Culture team. We understand that this transition won’t be easy, but please know that we’re committed to supporting you during this process, and we’re providing exit packages that include severance, transitional health insurance benefits, Employee Advocacy Program continuation, and outplacement services.
 
Today is one of the most difficult days we’ve had to face as a team, and these changes impact each of us deeply. However, it is my belief that these tough decisions were necessary as we look to capture the opportunity in front of us. 

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Together, we are committed to delivering the best premium audio experience in North America. We are evolving our service to give the next generation of listeners new ways to discover and engage with our incredible programming and talent. With our vision as clear as ever, and our operating transformation now underway, we will continue to make investments as we gear up for our next major milestone: the launch of a new, best-in-class SiriusXM experience.

Again, to those impacted by these changes, I thank you for all that you’ve done to bring SiriusXM to where it is today, and I wish you all the best in your future endeavors. 

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We’ll discuss these changes and our path forward during our next Company-wide All Hands meeting. In the meantime, I’ll be in touch later today to share an update and you’ll also hear more details from your respective Executive Leaders throughout the remainder of this week.

In closing, thank you for your focus, dedication, and resilience. This is not an easy moment for any of us, so it’s more important than ever that we support each other, and that you lean on our leaders, including me, as we work through next steps.

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– Jennifer 



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Lululemon shares jump as holiday-quarter sales surge

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A Lululemon sign is seen at a shopping mall in San Diego, California, November, 23, 2022.
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Mike Blake | Reuters

Lululemon on Tuesday reported strong holiday-quarter sales, suggesting wealthier shoppers are still purchasing yoga pants and tops despite rising prices for essential goods.
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The company also issued upbeat guidance for its new fiscal year.

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Shares of Lululemon jumped about 11% in after-hours trading following the report. Through Tuesday’s close, the stock is about flat for the year, putting the company’s market value at $40.87 billion.

Here’s what the company reported for the three-month period ended Jan. 29, compared with Wall Street expectations based on a survey of analysts by Refinitiv:

  • Earnings per share: $4.40 adjusted vs $4.26 expected
  • Revenue: $2.77 billion vs. $2.7 billion expected

Lululemon’s fourth-quarter net income fell to $119.8 million, or 94 cents per share, from $434.5 billion, or $3.36 per share, a year ago. Excluding impairment and other charges related to the acquisition of Mirror, as well as other items, per-share earnings were $4.40.

Revenue rose to $2.77 billion from $2.13 billion a year ago.

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The company expects fiscal 2023 revenue of between $9.3 billion and $9.41 billion, topping Wall Street’s expectations of $9.14 billion, according to Refinitiv estimates. The company expects full-year profit of between $11.50 and $11.72 per share, compared with Refinitiv estimates of $11.26 per share.

“Looking ahead, we remain optimistic regarding our ability to deliver sustained growth and long-term value for all our stakeholders,” said Chief Financial Officer Meghan Frank in a statement.

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The Vancouver-based athletic apparel retailer said total comparable sales for the fourth quarter increased by 27%. Also called same-store sales, the metric includes sales from stores open continuously for at least 12 months.

“We believe that it is one of the few companies in the space that has a very long pathway for growth, and it’s also a very highly visible one,” said Rick Patel, managing director at Raymond James.

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Patel said his firm, which maintains a strong buy rating on the stock, sees upside in Lululemon’s international business and its men’s business, and that the worst of the company’s inventory struggles are in the past.

In December, Lululemon said inventories at the end of its third quarter were up 85% year-over-year. The company said Tuesday that as of the end of 2022, inventories were up 50%.

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Home prices cool in January, even falling in some cities, S&P Case-Shiller says

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A “For Sale” sign outside of a home in Atlanta, Georgia, on Friday, Feb. 17, 2023.
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Home prices cooled in January, up only 3.8% nationally than they were a year earlier, according to the S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index. That is down from 5.6% in December.
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Prices have been falling for seven straight months, but the decline was a bit smaller in January. That was likely due to a brief drop in mortgage rates and a resulting jump in sales.

The 10-city composite rose 2.5% year over year, down from 4.4% in December. The 20-city composite also rose 2.5%, down from 4.6% in the previous month.

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Home prices have been cooling due to higher mortgage rates. The average rate on the popular 30-year fixed mortgage set more than a dozen record lows during the first two years of the pandemic, briefly going below 2%, but it grew sharply. Since fall, the rate has been hovering in the high 6% range, although it’s been volatile in recent weeks due to several bank failures and the resulting stress on the overall banking industry.

“Despite this, the Federal Reserve remains focused on its inflation-reduction targets, which suggest that rates may remain elevated in the near-term,” said Craig Lazzara, managing director at S&P DJI, in a release. “Mortgage financing and the prospect of economic weakness are therefore likely to remain a headwind for housing prices for at least the next several months.”

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Prices were lower year over year in San Francisco (-7.6%), Seattle (-5.1%), Portland, Oregon (-0.5%) and San Diego (-1.4%). They were flat in Phoenix.

Miami, Tampa and Atlanta again saw the hottest annual price gains of the top 20 cities. Miami prices were up 13.8%, Tampa prices up 10.5%, and Atlanta prices rose 8.4%. All 20 cities, however, reported lower prices in the year ending January 2023 versus the year ending December 2022.

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Homebuyers may be seeing more flexible sellers this spring, but there are still too few homes available for sale. Mortgage lending may also tighten in light of pressure on the banking system.

“More expensive, less available borrowing, especially with an unclear economic outlook, is likely to continue to limit buyer demand. Though home sales are expected to rebound in line with seasonal trends, this spring’s sales pace is expected to remain lower than last year, as uncertainty and high costs limit activity,” said Hannah Jones, economic data analyst for Realtor.com.

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Virgin Orbit extends unpaid pause as Brown deal collapses, ‘dynamic’ talks continue

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NEWQUAY, ENGLAND – JANUARY 09: A general view of Cosmic Girl, a Boeing 747-400 aircraft carrying the LauncherOne rocket under its left wing, as final preparations are made at Cornwall Airport Newquay on January 9, 2023 in Newquay, United Kingdom. Virgin Orbit launches its LauncherOne rocket from the spaceport in Cornwall, marking the first ever orbital launch from the UK. The mission has been named Start Me Up after the Rolling Stones hit. (Photo by Matthew Horwood/Getty Images)
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Matthew Horwood | Getty Images News | Getty Images

Virgin Orbit is again extending its unpaid pause in operations to continue pursuing a lifeline investment, CEO Dan Hart told employees in a company-wide email.
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Some of the company’s late-stage deal talks, including with private investor Matthew Brown, collapsed over the weekend, people familiar with the matter told CNBC.

Hart previously planned to update employees on the company’s operational status at an all-hands meeting at 4:30 p.m. ET on Monday afternoon, according to an email sent to employees Sunday night. At the last minute, that meeting was rescheduled “for no later than Thursday,” Hart said in the employee memo Monday.

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“Our investment discussions have been very dynamic over the past few days, they are ongoing, and not yet at a stage where we can provide a fulsome update,” Hart wrote in the email to employees, which was viewed by CNBC.

Brown told CNBC’s “Worldwide Exchange” last week he was in final discussions to invest in the company. A person familiar with the terms told CNBC the investment would have amounted to $200 million and granted Brown a controlling stake. But discussions between Virgin Orbit and the Texas-based investor stalled and broke down late last week, a person familiar told CNBC. As of Saturday those discussions had ended, the person said.

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Separately, another person said talks with a different potential buyer broke down on Sunday night.

The people asked to remain anonymous to discuss private negotiations. A representative for Virgin Orbit declined to comment.

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Hart promised Virgin Orbit’s over 750 employees “daily” updates this week. Most of the staff remain on an unpaid furlough that Hart announced on Mar. 15. Last week, a “small” team of Virgin Orbit employees returned to work in what Hart described as the “first step” in an “incremental resumption of operations,” with the intention of preparing a rocket for the company’s next launch.

Virgin Orbit’s stock closed at 54 cents a share on Monday, having fallen below $1 a share after the company’s pause in operations.

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Virgin Orbit developed a system that uses a modified 747 jet to send satellites into space by dropping a rocket from under the aircraft’s wing mid-flight. But the company’s last mission suffered a mid-flight failure, with an issue during the launch causing the rocket to not reach orbit and crash into the ocean.

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The company has been looking for new funds for several months, with majority owner Sir Richard Branson unwilling to fund the company further.

Virgin Orbit was spun out of Branson’s Virgin Galactic in 2017 and counts the billionaire as its largest stakeholder, with 75% ownership. Mubadala, the Emirati sovereign wealth fund, holds the second-largest stake in Virgin Orbit, at 18%.

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The company hired bankruptcy firms to draw up contingency plans in the event it is unable to find a buyer or investor. Branson has first priority over Virgin Orbit’s assets, as the company raised $60 million in debt from the investment arm of Virgin Group.

On the same day that Hart told employees that Virgin Orbit was pausing operations, its board of directors approved a “golden parachute” severance plan for top executives, in case they are terminated “following a change in control” of the company.

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