Business
Oil Prices Tumble as China-U.S. Tariffs Weaken Economic Confidence
U.S. oil prices bounced back to around $62 a barrel on Wednesday afternoon, more than erasing earlier losses after President Trump said he would pause his reciprocal tariffs for most countries for 90 days.
The commodity price, an indicator of economic confidence, has swung wildly over the past week, trading as high as $72 a barrel and as low as $55. Oil prices sank into the mid $50s early Wednesday after China said it would match Mr. Trump’s tariffs blow for blow.
Wednesday afternoon’s recovery put prices back around the level that many U.S. oil companies require to make money drilling new wells. But prices are still far lower than before Mr. Trump ratcheted up tariffs on nearly all countries with which the United States trades goods.
For now, many companies are waiting to see where prices settle before adjusting drilling or spending plans. As this week has demonstrated, commodity prices can be very volatile.
If prices fall further, to around $50 a barrel, U.S. oil production could decline by about 8 percent in a year, according to S&P Global Commodity Insights.
Peter Navarro, a trade adviser to Mr. Trump, has frequently cited the benefits of $50 a barrel oil, saying it would curb inflation.
Earnings are likely to fall as well, the Moody’s ratings agency said Wednesday, forecasting that profits will shrink by 10 percent or more across the global energy industry over the next 12 to 18 months. Moody’s previously expected profits would be flat compared with 2024.
The recent price slide has spooked U.S. oil executives, many of whom backed Mr. Trump’s campaign in hopes that he would open new areas for drilling and make it easier to secure permits for pipelines and other infrastructure.
“That’s a pretty expensive trade-off,” Dan Pickering, chief investment officer for Pickering Energy Partners, a Houston financial services firm, said on Friday, when oil was trading around $62 a barrel.
A broad group of U.S. oil and gas stocks was down about 16 percent in the past week.
It has been about four years since oil prices were this low. The decline has yet to make a dent in the cost of gasoline, which averaged $3.24 a gallon on Wednesday, the same as last week, according to the AAA motor club.
Job cuts are hammering the tech industry as companies ramp up investments in artificial intelligence.
This week, San Jose-based tech company Cisco said it was cutting fewer than 4,000 jobs or less than 5% of its workforce. Cisco announced the layoffs the same day that the company reported that it grew its revenue to $15.8 billion and net income to $3.4 billion for the third quarter ending in April.
Cisco Chief Executive Chuck Robbins told employees in an email that he’s “confident” that the company will “win in the AI era” but that requires “focus, urgency, and the discipline to continuously shift investment toward the areas where demand and long-term value creation are strongest.”
“This means making hard decisions — about where we invest, how we’re organized, and how our cost structure reflects the opportunity in front of us,” he told employees in the email, which was published on Cisco’s website.
Cisco provides products and services in areas such as networking, cybersecurity and remote work.
Microsoft-owned LinkedIn, a professional social network that people use to apply to jobs, is also laying off workers.
Reuters, citing two people familiar with the matter, reported on Wednesday that LinkedIn was laying off 5% of its staff or roughly 875 people.
“As part of our regular business planning, we’ve implemented organizational changes to best position ourselves for future success,” a LinkedIn spokesperson said in a statement.
In a memo published on Business Insider, LinkedIn Chief Executive Daniel Shapero told employees that the cuts would impact its global business organization, marketing and engineering teams. The company, he said, is also focusing on operating “more profitably.”
“We need to reinvent how we work, with agile teams focused on our highest priorities, and by shifting investments toward areas such as infrastructure to fulfill our mission and vision over the long term. This requires hard prioritization and tradeoffs,” he said in the memo.
Amazon, which said in January it was slashing 16,000 jobs, is also making cuts in its selling partner services team. The company didn’t say how many people were laid off.
“We regularly review our organizations to ensure we’re best set up to deliver on our goals. Following a recent review, we’ve made the difficult decision to eliminate a relatively small number of roles in our Selling Partner Services team. We don’t take decisions like this lightly, and we’re committed to supporting affected employees with transitional health care, a separation payment, and outsourced job placement services,” an Amazon spokesperson said in a statement.
The cuts come as other major tech companies this year, including Meta, Block, Oracle and others, lay off thousands of workers.
Cloudflare and cryptocurrency exchange Coinbase have also recently announced job cuts. Cloudflare’s job cuts included laying off 224 people in its San Francisco headquarters, a notice to the California Employment Development Department shows.
Some tech companies, which are also selling AI-powered products, are saying that workers can accomplish more with fewer people by using AI to generate code and complete tasks. Others have cited restructuring and cost-cutting to offset the billions of dollars they’re spending on AI infrastructure.
Global mergers are not typically on the agenda of a New York City mayor. But Mayor Zohran Mamdani is weighing in on a proposed deal that he says would financially harm many of the city’s immigrants.
In a letter, Mr. Mamdani urged the New York State Department of Financial Services to block Western Union’s proposed $500 million acquisition of International Money Express, a firm that sends money transfers from the United States to Latin America.
The April 24 letter, which The New York Times obtained, argues that a combination of the companies, both large players in New York City, could lead to higher fees and worse service for customers.
Western Union and International Money Express, known as Intermex, operate retail locations where recent immigrants transfer money, often to relatives in their native countries. These remittances, which total billions of dollars a year, are a vital resource for immigrants who do not have access to traditional bank accounts. Across the United States, remittances have been increasing as immigrants have sent home as much money as they can before they may be deported.
“Remittances are a crucial lifeline for New Yorkers and their communities abroad,” Mr. Mamdani wrote in the letter. He added that the deal “would further strain the already challenging economic circumstances facing New York City’s immigrant communities.”
The deal, announced in August, has been expected to close in mid-2026, subject to approval from authorities including the Justice Department and the nation’s state financial regulators.
In a response to Mr. Mamdani’s letter, Western Union told the Department of Financial Services that the deal would “ensure that accessible and affordable” services remained available for New York City immigrants by helping it compete against online only rivals.
Western Union said it was “committed” to retail remittances, adding that they now account for roughly 60 percent of its revenue.
“Failing to support the combination would merely create the illusion of greater competition by undercutting the ability of Western Union and Intermex, as a combined enterprise, to continue to provide, improve and innovate their services at retail locations,” the company said in its response.
It also said the Department of Financial Services was the only state regulator that hadn’t approved the deal.
In a statement on Wednesday, Western Union said that it was “engaging constructively” with the department as part of the review process and that “we remain confident in the transaction and our ability to meet all regulatory requirements.”
Intermex did not immediately respond to a request for comment. Semafor earlier reported Mr. Mamdani’s letter.
Mr. Mamdani’s role as an antitrust enforcer may be limited, given the relatively few deals that require state or local approval. But one of his influential advisers has a background in bringing a progressive lens to mergers and acquisitions. Lina Khan, the chair of the Federal Trade Commission in the Biden administration, was co-chair of Mr. Mamdani’s transition team after his election in November and remains an outside adviser to him.
By voicing his objection to the Western Union deal, Mr. Mamdani is drawing attention to another issue of affordability, which was a central tenet of his campaign and remains a focus of his fledgling administration, whether the topic is the cost of rental housing or World Cup tickets.
A regional Coca-Cola manufacturer will shut down a plant in Ventura after over 100 years in production.
Reyes Coca-Cola Bottling will close the plant on July 10, the company announced in a recent state filing.
“We regularly assess our locations, products and services to ensure we can continue driving sustainable growth and innovation across our business,” a spokesperson for Reyes Coca-Cola Bottling told SFGate.
Employers must submit a Worker Adjustment and Retraining Notification, or WARN notice, to alert employers, state and local officials at least 60 days before major layoffs. The initial notice was submitted Friday.
A total of 85 employees will be affected by the closure, according to the notice. Seventy-eight of them will be reassigned to other facilities, and the rest will be able to apply for open roles at other Coca-Cola plants, a company spokesperson told SFGate.
Operations from the Ventura plant will be transferred to other Southern California facilities.
A spokesperson for Reyes Coca-Cola Bottling didn’t immediately respond to a request for comment.
Coca-Cola shut down a Bay Area plant in American Canyon in late December. That closure affected at least 45 workers, according to the WARN notice. Reyes Coca-Cola Bottling also shut down its Salinas location in June.
Reyes Coca-Cola Bottling is a subdivision of Reyes Holding, which manages major beer and drink distributors and McDonald’s largest global distributor. Reyes Holding began distributing Coca-Cola in 2015 and officially formed Reyes Coca-Cola Bottling in 2022.
The company runs 22 manufacturing centers in California, including two production and distribution centers in Los Angeles. The company operates 50 facilities across 10 states.
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