Raphael Stevens

Sierra Space, one of the sector’s most valuable private companies, laid off several hundred employees and contractors this week, CNBC has learned.
A spokesperson confirmed Sierra Space let go of about 165 employees on Thursday, but declined to specify the number of contractors affected.
Sierra Space’s realignment also includes adding nearly 150 employees with security clearances from Sierra Nevada Corp. to work on several classified contracts.

A rendering on a Dream Chaser spaceplane in orbit.
Sierra Space

Sierra Space, one of the sector’s most valuable private companies, laid off several hundred employees and contractors this week, CNBC has learned.
A Sierra Space spokesperson confirmed the company let go of about 165 employees on Thursday, but declined to specify the number of contractors affected. Former Sierra Space employees told CNBC that the layoffs included a significant number of contractors, with the cuts including hundreds of personnel in total.

The laid-off employees received two weeks of paid non-working notice, plus four weeks of severance pay and health care benefits through the end of the year. Sierra Space had about 2,000 employees before reducing its workforce, the company spokesperson said.
The Colorado-based company, which was recently valued at more than $5 billion, is pushing hard to fly the long-awaited first mission of its Dream Chaser spaceplane.
Sierra Space this week shipped the first Dream Chaser, named Tenacity, for pre-launch testing at NASA’s Armstrong facility in Ohio. The layoffs began soon after, the Sierra Space spokesperson said, noting the company conducted a surge in hiring this year to complete work on the Tenacity spacecraft.
With Tenacity shipped, Sierra Space’s spokesperson said the company is realigning to focus on the operations phase of Dream Chaser’s first mission, as well as on classified national security work.
The latter part of Sierra Space’s realignment includes adding nearly 150 employees with security clearances from Sierra Nevada Corp., the aerospace and defense contractor owned by Fatih and Eren Ozmen, which the space company was spun out of two years ago. Sierra Space’s spokesperson said the company is creating a national security space team to work on several classified contracts.

Sierra Space also recently lost a pair of senior executives before the layoffs: COO Jeff Babione, who retired, and Senior Vice President of Space Destinations Neeraj Gupta. The company said the departures were unrelated.
Two months ago, Sierra raised just under $300 million at a $5.3 billion valuation.

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Dream Chaser has been in development for years with a goal to deliver cargo and eventually crew to low Earth orbit as a reusable vehicle. It resembles a miniaturized NASA Space Shuttle in appearance and is built to launch atop a traditional rocket and land on a runway like an airplane.
The first Dream Chaser launch was previously scheduled for late last year, but delays in the development of United Launch Alliance’s Vulcan rocket pushed back that timeline. Dream Chaser is planned to launch on ULA’s second Vulcan mission, with the first Vulcan launch targeting December.
Dream Chaser has won NASA contracts to fly seven cargo missions to and from the International Space Station. More

Music mogul Sean “Diddy” Combs was sued by singer Cassie, who alleged he had raped and sexually trafficked her over the course of 10 years.
“After years in silence and darkness, I am finally ready to tell my story,” said the accuser, whose legal name is Casandra Ventura.
The New York federal court lawsuit also names Bad Boy Records, Bad Boy Entertainment, Epic Records and Combs Enterprises as defendants.

Cassie Ventura and Sean ‘Diddy’ Combs attend the Heavenly Bodies: Fashion & The Catholic Imagination Costume Institute Gala at The Metropolitan Museum of Art on May 7, 2018 in New York City.
John Shearer | Getty Images | The Hollywood Reporter | Getty Images

Hip-hop music and fashion mogul Sean “Diddy” Combs was hit Thursday with a civil lawsuit accusing him of raping and sex trafficking singer Cassie, his former romantic partner, over the course of a decade.
In addition to Combs, the suit names Bad Boy Records, Bad Boy Entertainment, Epic Records and Combs Enterprises as defendants. 

Combs, one of the most influential and successful executives in music, founded Bad Boy in the early 1990s. He also launched a clothing label, Sean John, and developed the Ciroc vodka brand. As recently as last year, Forbes estimated his net worth at $1 billion.
“After years in silence and darkness, I am finally ready to tell my story, and to speak up on behalf of myself and for the benefit of other women who face violence and abuse in their relationships,” Cassie said in a statement about her bombshell suit, filed in U.S. District Court in Manhattan.
“With the expiration of New York’s Adult Survivors Act fast approaching, it became clear that this was an opportunity to speak up about the trauma I have experienced and that I will be recovering from for the rest of my life,” said Cassie, whose legal name is Casandra Ventura.
The Adult Survivors Act since last November allows accusers a one-year window to file civil claims of sexual abuse that otherwise would be barred by the statute of limitations.
Combs “vehemently denies these offensive and outrageous allegations,” his lawyer Ben Brafman said in a statement.

“Ms. Ventura’s demand of $30 million, under the threat of writing a damaging book about their relationship, was unequivocally rejected as blatant blackmail,” Brafman said. “Despite withdrawing her initial threat, Ms. Ventura has now resorted to filing a lawsuit riddled with baseless and outrageous lies, aiming to tarnish Mr. Combs’ reputation, and seeking a pay day.”
Cassie’s lawyer, Douglas Wigdor, shot back that Combs “offered Ms. Ventura eight figures to silence her and prevent the filing of this lawsuit. She rejected his efforts and decided to give a voice to all woman who suffer in silence.”
“Ms. Ventura should be applauded for her bravery,” Wigdor added. “No human should have to endure what Ms. Ventura has endured.”

Cassie’s accusations

Cassie’s suit says that in 2005, when she was 19 years old, the then 37-year-old Combs lured the singer into a professional relationship by signing her to his label, Bad Boy Records.
Within several years he induced her into a sexual relationship, and introduced her “to a lifestyle of excessive alcohol and substance abuse and required her to procure illicit prescriptions to satisfy his own addictions,” the suit alleges.
The suit claims that Combs raped Cassie in her home after she tried to leave him, “blew up” another man’s car after learning of his romantic interest in the singer, and often beat and kicked her.
And it says Combs “forced Ms. Ventura to engage in sex acts with male sex workers while masturbating and filming the encounters.”
“Throughout their relationship Mr. Combs was prone to uncontrollable rage, and frequently beat Ms. Ventura savagely,” the suit alleges.
“These beatings were witnessed by Mr. Combs’ staff and employees of Bad Boy Entertainment and Mr. Combs’s related businesses, but no one dared to speak up against their frightening and ferocious boss.”
Cassie’s suit is the latest legal challenge for Combs. Earlier this year, he sued Ciroc owner Diageo for alleged racial discrimination, saying they neglected Ciroc and his tequila brand, DeLeon. The company ended their relationship in June after about 16 years.
Combs also was a close friend of rapper Notorious B.I.G., known as Biggie. He was in Biggie’s entourage, in a separate vehicle, when the rapper was fatally shot in 1997.
— Additional reporting by Stefan Sykes and Mike Calia More

Gap beat Wall Street’s estimates due to strong sales at Old Navy and improvements at its namesake banner.
Slowdowns at Banana Republic and Athleta, the company’s other two brands, have dragged down its overall performance.
The retailer offered a muted holiday forecast and expects sales to be flat or down slightly.

A Gap retail store sign on September 20, 2022 in Los Angeles, California. 
Allison Dinner | Getty Images

Gap posted a better-than-expected third quarter on Thursday, but the apparel retailer still appears cautious ahead of the holiday season as it works to reverse slowdowns at Banana Republic and Athleta. 
The company, which also runs Old Navy and its namesake banner, far exceeded Wall Street’s estimates for profits and same-store sales, but only reaffirmed its full-year guidance and expects holiday-quarter sales to be flat to slightly negative. 

Shares soared more than 15% in extended trading. As of Thursday’s close, they were up about 21% year to date.
Here’s how Gap performed during the quarter compared with what Wall Street was anticipating, based on a survey of analysts by LSEG, formerly known as Refinitiv:

Earnings per share: 59 cents, adjusted vs. 19 cents expected
Revenue: $3.77 billion vs. $3.60 billion expected

The company’s reported net income for the three-month period that ended Oct. 28 was $218 million, or 58 cents per share, compared with $282 million, or 77 cents per share, a year earlier. Excluding costs associated with its restructuring, Gap reported earnings of 59 cents per share. 
Sales dropped to $3.77 billion, down about 7% from $4.04 billion a year earlier. 
Gap hasn’t managed to reverse its ongoing revenue slump, but its same-store sales were far better than expected. They dropped only 2%, compared to the 8.7% slowdown that analysts had expected, according to StreetAccount. 

Read more CNBC retail news

For the third quarter in a row, Gap also saw improvements in its gross margin thanks to lower commodity costs, fewer promotions and a series of cost-cutting initiatives that have been underway for several quarters. Those moves include sweeping layoffs that cut more than 2,000 jobs.
During the quarter, Gap’s gross margin improved by 3.9 percentage points to 41.3%, which came in ahead of the 38.9% that analysts had anticipated, according to StreetAccount. The company said it expects gross margins to continue to improve.
The longtime apparel giant has been on a quest to improve sales and regain the relevancy that once defined the company. It recently tapped former Mattel executive Richard Dickson to be its chief executive. Dickson, who was credited with reviving the Barbie franchise during his time at the toy company, plans to use his branding prowess to turn Gap around and position the company back into the mainstream of popular culture. 
“Gap Inc. has weathered a lot of disruption over the last several years, both external macro factors, as well as execution missteps and strategically well intended initiatives have impacted the company. All that said, the opportunity is clear,” Dickson said on an earnings call with analysts, his first as Gap’s CEO. “I have conviction that we can reinvigorate our portfolio brands, while we lead a creative culture that attracts, retains and develops the best talent in the industry. I’m encouraged by the early progress we’ve made to date, but we have a long way to go and a lot of work to do.”
Gap saw modest improvements at Old Navy and its eponymous banner. But Banana Republic and Athleta have been dragging on the retailer’s overall performance, which is part of the reason it only reaffirmed its full-year guidance and offered a tepid forecast for its holiday quarter. 
During its fourth quarter, Gap expects sales to be flat to slightly negative compared to last year, which is a bit shy of the 0.3% increase that analysts had expected, according to LSEG.  
“We have work to do, I think, still at Banana and Athleta, as demonstrated by the performance in the quarter,” finance chief Katrina O’Connell told CNBC in an interview. “So our revenue outlook for Q4 shows that difference in brand outcomes as we think about continued strength in Old Navy and Gap but maybe a longer turn at Banana and a little bit more work to do to reset Athleta.”
Dickson called Gap’s holiday outlook “balanced” and told analysts it takes into account “the uncertain consumer environment.”
Here’s a closer look at each brand’s performance:

Old Navy: Sales at the discount brand came in at $2.13 billion, accounting for more than half of Gap’s overall revenue during the quarter. Sales fell 1% compared to last year, while comparable sales rose 1%. The brand saw strength in women’s and kids, and an uptick in activewear. Still, it has more work to do to improve product assortment and develop a pricing strategy that “clearly communicates jaw-dropping value” to win over cash-strapped families, said Dickson.

Gap: Revenue at Gap’s eponymous banner was $887 million, a 15% drop compared to last year. The brand is still reeling from the shutdown of Yeezy Gap and saw comparable sales decline 1%. It saw strength in women’s and baby apparel. Dickson noted Gap has massive brand awareness but has been “far too quiet in the cultural conversation.” He said the company needs to “reignite that dialogue, offering confident, trend-right assortments, priced right and expressed through big ideas and culturally relevant messaging.”

Banana Republic: Sales at Banana, known for its workwear and going out pieces, fell 11% compared to last year to $460 million. Comparable sales dropped 8%. The company said the brand is working to acquire new, high-value customers and re-position itself as a leading premium retailer after relying heavily on promotions over the last few years. Dickson expects Banana could become a big player in the wildly popular “quiet luxury space.”

Athleta: Gap’s activewear brand was the worst performer during the quarter. Sales came in 18% lower than last year at $279 million, while comparable sales fell a staggering 19%. The company is still working to improve Athleta’s product assortment and get back in touch with its core customer. When discussing the brand’s performance, Dickson bluntly called it “disappointing” and said a series of misfires have left it “off track.” However, recent changes to marketing strategies have shown promising results.

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Deflation could be coming, Walmart CEO Doug McMillon said.
Prices have fallen, especially on general merchandise and on some key grocery items, he said.
Yet the discounter struck a cautious tone, saying customers continue to watch their spending.

Barbie dolls (R) are displayed for sale ahead of Black Friday at a Walmart Supercenter on November 14, 2023 in Burbank, California. 
Mario Tama | Getty Images News | Getty Images

Shoppers may get an early present this holiday season: falling prices in many gift-giving categories.
On Thursday, Walmart CEO Doug McMillon said deflation could be coming as general merchandise and key grocery items, such as eggs, chicken and seafood get cheaper.

He said the retailer expects some of the stickier higher prices, such as the ones for pantry staples, to “start to deflate in the coming weeks and months,” too.
“In the U.S., we may be managing through a period of deflation in the months to come,” he said on the company’s Thursday earnings call. “And while that would put more unit pressure on us, we welcome it, because it’s better for our customers.”
For more than a year, consumers have coped with inflation that peaked around four-decade highs and drove up the cost of nearly everything, including groceries, rent and utilities. But McMillon’s comments echoed what the government and other retailers said earlier this week, offering signs of relief for inflation-weary consumers.
Inflation was flat month over month, according to the latest consumer price index report from the Labor Department on Tuesday. Core CPI, a metric that excludes the categories of food and energy that tend to be volatile, hit a two-year low. Home Depot CFO Richard McPhail said “the worst of the inflationary environment is behind us” on an earnings call Tuesday.
Even Thanksgiving will be lighter on Americans’ wallets compared with last year. Lower turkey prices mean that the average cost of a dinner for 10 people will be $61.17, down 4.5% from last year’s record of $64.05, according to the American Farm Bureau Federation.

Stubborn inflation has been one of the biggest challenges for retailers, including Walmart, the world’s largest retailer. It felt pressure from that again in the fiscal third quarter, even as it beat Wall Street’s sales and earnings expectations. Chief Financial Officer John David Rainey told CNBC that shoppers have waited for items to go on sale before buying them, such as holding out for a Black Friday event.
There’s still some time to go before inflation completely eases, however. Across most categories, Americans are still spending more on the same items, according to the latest CPI numbers. Food at home, electricity and haircuts cost more than they did a year ago.
At Walmart, groceries are up by a mid-single-digit percentage compared with last year, but still elevated by the high-teens percentage compared with two years ago, Rainey said.
Walmart’s McMillon said some stubborn food prices continue to be a concern.
“The pockets of disinflation we are seeing are helping, but we like to see more, faster,” he said.

Read more CNBC retail news

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General Motors union workers ratified a record deal with the United Auto Workers after a contentious final few days of voting.
Ratification of the deal came under doubt Wednesday morning, after seven of GM’s 11 U.S. assembly plants rejected the pact.
According to the UAW’s vote tracker, the deal was supported by 54.7% of the nearly 36,000 autoworkers at GM who voted.

United Auto Workers members strike the General Motors Lansing Delta Assembly Plant on September 29, 2023 in Lansing, Michigan. 
Bill Pugliano | Getty Images

DETROIT – General Motors union workers ratified a record deal with the United Auto Workers after a contentious final few days of voting, according to results posted Thursday morning by the union.
Much like the negotiations themselves, voting was not as smooth as many thought it would be. A majority of the Detroit automaker’s large assembly plants rejected the pact, however it wasn’t enough to offset support at smaller facilities and a handful of other assembly plants.

Ratification of the deal came under doubt Wednesday morning, after seven of GM’s 11 U.S. assembly plants rejected the pact. But a swing in voting results in favor of the deal, specifically at a SUV plant in Texas, gave the agreement a much needed lifeline.
According to the UAW’s vote tracker, the deal was supported by 54.7% of the nearly 36,000 autoworkers at GM who voted. The vote total was 19,683 in support versus 16,274 against – a margin of 3,409 votes.
Both the UAW and GM declined to comment on the results until they’ve been finalized.
Voting on similar contracts at Ford Motor and Chrysler parent Stellantis is ongoing, with support of roughly 67% of unionized workers at each automaker who voted as of Thursday morning, according to the union. Barring any major shifts or swing in turnouts, those deals are likely to pass.
GM’s voting was closer, in part, due to the demographics of the company’s workforce. The automaker has the highest number of traditional workers on a percentage basis compared with its crosstown rivals. Such workers have voiced disapproval for the wage increases granted to them by the deals, compared with those offered to newer hires. They were also dissatisfied with pension contributions and retirement benefits.

Read more CNBC auto news

For the union and UAW President Shawn Fain, the deals represent significant economic gains. They include 25% pay increases; a path to secure future jobs for union ranks such as battery plants; and a springboard for organizing efforts at other nonunion automakers operating in the U.S. — a main goal of Fain moving forward.
For the companies as well as their investors, the contracts represent the top-end of forecast increases in labor costs. While the automakers several times called foul on the union’s tactics, including six weeks of targeted strikes, they should be able to stomach the cost rises. That’s not to say they won’t be seeking offsets to the increases elsewhere in the forms of future investments, restructuring and other means.
Ford CFO John Lawler last month said the UAW deal, if ratified by members, would add $850 to $900 in costs per vehicle assembled. He said Ford will work to “find productivity and efficiencies and cost reductions throughout the company” to offset the additional costs and deliver on previously announced profitability targets.
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Correction: The vote total was 19,683 in support versus 16,274 against – a margin of 3,409 votes. An earlier version misstated a figure. More

“Hunger Games: The Ballad of Songbirds and Snakes” is expected to haul between $42 million and $55 million during its opening weekend.
Each of the other four films in the Hunger Games franchise debuted with more than $100 million in ticket sales at the domestic box office.
The prequel to the $3 billion Hunger Games franchise, based on the 2020 novel of the same name by author Suzanne Collins, is a standalone film set some 60 years before Katniss Everdeen volunteers as tribute.

Tom Blyth and Rachel Zegler star as Coriolanus Snow and Lucy Gray Baird in Lionsgate’s “Hunger Games: The Ballad of Songbirds and Snakes.”

“Snow lands on top.”
It’s the mantra of the main character Coriolanus Snow in the upcoming “Hunger Games: The Ballad of Songbirds and Snakes” and the hope of its distributor Lionsgate.

The prequel to the $3 billion Hunger Games franchise, based on the 2020 novel of the same name by author Suzanne Collins, is a standalone film set some 60 years before Katniss Everdeen volunteers as tribute. It debuts in theaters this weekend.
“Ballad” is headed for a solid opening, likely hauling in between $42 million and $55 million, according to box office analysts, as the first new entry in the Hunger Games saga since 2015.
“It’s an interesting position for the Hunger Games prequel because the expectation has suddenly become that it has a chance to open on par with ‘The Marvels,’ give or take, after the latter film lived down to bearish forecasts,” said Shawn Robbins, chief analyst at BoxOffice.com.
Disney and Marvel Studios’ “The Marvels” significantly underperformed expectations when it debuted in theaters earlier this month. The film tallied $46.1 million domestically over its debut weekend, the lowest in the 30-plus-film franchise’s history. The film had initially been slated to snag between $75 million and $80 million, but those expectations shrank to $60 million and $65 million just ahead of its opening.
“There has always been a certain magic surrounding the Hunger Games franchise,” said Paul Dergarabedian, senior media analyst at Comscore. “This latest installment looks to take the goodwill generated by the original films in the series and parlay that into what promises to be solid $50 [million] plus debut for this intriguing and exciting origin story.”

The film centers on a young Coriolanus Snow, a man destined to be president of Panem, the fictional country based on the continental United States. It sheds light on what sparked his rise to become the tyrannical ruler seen in later Hunger Games stories.
While box office analysts see a $50 million opening as a positive — given Hollywood’s recent writers and actors strikes and a change in consumer moviegoing habits — “Ballad” will open significantly lower than its predecessors. Each of the other four films in the Hunger Games franchise debuted with more than $100 million in ticket sales at the domestic box office.

Hunger Games franchise opening weekends

“Hunger Games” (2012) — $152.5 million
“Hunger Games: Catching Fire” (2013) — $158 million
“Hunger Games: The Mockingjay Part One” (2014) — $121.9 million
“Hunger Games: The Mockingjay Part Two” (2015) — $102.6 million

Source: Comscore

There is some trepidation from box office analysts on whether “Ballad” will be able to recapture the audiences that came out nearly a decade ago for previous installments.
“We’re talking about a prequel that doesn’t have the star power its predecessors did with Jennifer Lawrence,” Robbins said. “The fan base is a little bit older now, the [young adult] genre is beyond its peak of popularity more than a decade ago.”
Prequels are generally challenging to market outside the established core fan base, Robbins said.
“The biggest variable here is what portion of today’s young female audience this new Hunger Games story can bring in with an all new cast,” he said.
So far, the film has a 61% score on review aggregator Rotten Tomatoes from 90 reviews, with critics asserting that the outstanding cast and exciting story make the film a worthy return to the Hunger Games universe. Some, however, found the pacing of the film too rushed. The screenplay is quite faithful to Collins’ novel, which has more than 500 pages.
The film is also a standalone, with no promise for future installments. Producers of the film franchise have said they do not plan on returning to Panem unless Collins writes another book.
Still, “Ballad” arrives in theaters at a crucial time for Lionsgate — with the company set to split from Starz and on the heels of its recent acquisition of Entertainment One from Hasbro — and for the box office. It opens just head of Disney’s animated feature “Wish” and AppleTV+’s “Napoleon,” which are due out next week on Thanksgiving.
“This is a table-setting weekend that theaters and studios definitely need after another feast-or-famine fall season impacted by release delays and industry strikes, both of which will continue to be felt through the holiday season,” said Robbins.
Disclosure: Comcast is the parent company of NBCUniversal and CNBC. NBCUniversal owns Rotten Tomatoes. More

Mattel poaches ex-Fox, Sony exec to take the reigns of the toy maker’s television studio.
It’s the latest move by Mattel to double down on it’s shelf to screen strategy, which culminated in the blowout “Barbie” film success this summer.
Mattel says more television content is coming next year, including a “Barney” reboot.

Mattel headquarters in El Segundo, California, US, on Friday, April 28, 2023.
Bloomberg | Getty Images

Mattel hopes a new hire will help it expand its content slate, following the blowout box office success of “Barbie.”
The toy maker, home to Hot Wheels and American Girl, announced Thursday that it has hired former Fox and Sony exec Michelle Mendelovitz as head of Mattel Television Studios.

“The opportunity to connect worldwide audiences with Mattel’s iconic brands, franchises, and characters through high-quality storytelling is greater than ever before,” said Mattel Chief Franchise Officer Josh Silverman. “I look forward to the impact Michelle and Mattel Television Studios will have on expanding the content slate to the delight of our fans around the globe.”
Mendelovitz previously held senior roles at Disney 20th Television Studios, Apple TV+, Sony Pictures Television and CBS Television Network.
Mattel Television Studios, which produces and distributes television content for the toy company, has previously created TV shows based on some of the company’s most well-known intellectual property. Releases ranged from live action shows to animated specials and series based on toy brands like Barbie, Thomas & Friends and Hot Wheels, the company said in a press release.
It’s Mattel’s latest move to double down on the strategy that led to the record-breaking “Barbie” blockbuster this summer.
Mattel CEO Ynon Kreiz said last month that the company is focused on “capturing the full value of our IP outside the toy aisle.”

The toy maker’s content slate will only grow with Mendelovitz at the helm, a Mattel spokesperson told CNBC. “Hot Wheels Let’s Race” and “Masters of the Universe: Revolution” are a few of the new releases planned for the upcoming year.
The toy company is also banking on taking IP from the screen to the shelves. Mattel plans to launch new Barney content through TV, film and YouTube videos in 2024, followed by a toy and product line in 2025. The animated series, “Barney’s World,” will launch on Cartoon Network and Max next year, the company announced earlier this year. “Barney & Friends,” the original children’s TV program starring the famous purple dinosaur, wrapped production of new episodes in 2010. More