Goldman, Allstate cut jobs as Dems, GOP fail to reach COVID-19 aid deal - InvestingChannel

Goldman, Allstate cut jobs as Dems, GOP fail to reach COVID-19 aid deal

As Democrats and Republicans continue to struggle to reach a pact on a new COVID-19 relief package, multiple big companies have begun to report job cuts and corporate restructurings as the pandemic continues to weigh on the economy.

WHAT’S NEW: As Wall Street ended the regular session trading higher across all major indices, CNBC reported that House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin failed to reach a COVID-19 stimulus deal during a more than 90-minute meeting Wednesday. Pelosi noted that the two sides will continue talks as they attempt to establish an elusive fifth relief package that could pass both chambers of Congress.
HOUSE VOTE: House Democrats were planning to vote on the $2.2T rescue package later Wednesday, even though the move would be largely symbolic as Senate Majority Leader Mitch McConnell has already opposed the plan, according to CNBC. Later on, however, CNBC said that House Democrats have delayed their planned vote on the package in order to allow more time for deal talks.
LAYOFFS: Both prior to and following the news of both sides failing to reach an agreement, multiple large companies announced or are reportedly engaged in serious job cuts as the economic fallout from the COVID-19 crisis continues. Bloomberg reported after the market close that Goldman Sachs (GS) plans to eliminate about 1% of its workforce, or roughly 400 jobs, ending the moratorium on layoffs the bank had placed earlier this year.

Meanwhile, Allstate (ALL) announced in a filing that it will cut about 3,800 positions in an effort to reduce costs. Prior to the close, Bayer (BAYRY) announced that it plans to cut EUR.15B in annual costs and may eliminate jobs and sell assets, while Royal Dutch Shell (RDS.A) said before today’s open that it plans to slash up to 9,000 jobs, which CEO Ben van Beurden believes could reduce annual costs by up to $2.5B by 2022. Such moves came after CNBC reported yesterday that Disney (DIS) told employees in a letter that due to prolonged closures of its California theme parks and limited attendance at its open parks, it will lay off 28,000 workers across its parks, experiences and consumer products segment.

FED: Meanwhile, the Federal Reserve Board announced after Wednesday’s close that, due to the “continued economic uncertainty” from the COVID-19 response, it will extend for an additional quarter several measures to ensure that large banks maintain a high level of capital resilience. For the fourth quarter of 2020, large banks, namely those with more than $100B in total assets, will be prohibited from making share repurchases. Additionally, dividend payments will be capped and tied to a formula based on recent income, according to the Fed.

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