Market Beats | White House Orders Agencies to Plan Mass Firings in Event of Shutdown; Starbucks to Close Stores, Cut 900 Jobs; Accenture Sees US Federal Spending Cuts Weighing on Growth Despite Strong Q4; Microsoft Adds Anthropic Models to Copilot, Broadening AI Partnerships; Nearly One-Third of Student Loan Borrowers Are Delinquent

—— White House Orders Agencies to Plan Mass Firings in Event of Shutdown; Starbucks to Close Stores, Cut 900 Jobs; Accenture Sees US Federal Spending Cuts Weighing on Growth Despite Strong Q4; Microsoft Adds Anthropic Models to Copilot, Broadening AI Partnerships; Nearly One-Third of Student Loan Borrowers Are Delinquent

1. White House Orders Agencies to Plan Mass Firings in Event of Shutdown

The White House Office of Management and Budget (OMB) has instructed federal agencies to prepare plans for mass layoffs in the event of a government shutdown, marking a sharp escalation from standard protocols.

Traditionally, nonessential federal workers are furloughed during shutdowns but return once funding is restored, usually with back pay. The new OMB memo, sent late Wednesday, directs agencies to identify programs set to lose discretionary funding on Oct. 1 with no alternative resources available, saying such programs are “no longer statutorily required to be carried out.”

Agencies are to draft plans to permanently cut jobs tied to programs that don’t align with Trump administration priorities. If Congress fails to act before Oct. 1, those cuts would take effect.

In a typical shutdown, about 60% of federal employees are deemed essential and continue working, while the rest are furloughed. A mass-firing approach could have a tangible negative effect on US economic growth.

Senate Minority Leader Chuck Schumer denounced the move as “an attempt at intimidation,” saying, “these unnecessary firings will either be overturned in court or the administration will end up hiring the workers back.”

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2. Starbucks to Close Stores, Cut 900 Jobs

Starbucks Corp. announced Thursday it will shut stores and eliminate 900 positions as part of a $1billion restructuring plan aimed at reviving the coffee chain under CEO Brian Niccol.

The company said its store count across the US and Canada will shrink by about 1% in fiscal 2025, ending with 18,300 locations. After that, Starbucks plans to resume expansion and refurbish about 1,000 stores.

Following a review of its coffeehouses, Starbucks identified locations with no clear path to profitability and opted to close them, while focusing investment on sites aligned with Niccol’s vision of making cafes more inviting. “Early results from coffeehouse uplifts show customers visiting more often, staying longer and sharing positive feedback,” Niccol said in a letter to employees.

Niccol, who took over a year ago, is seeking to reverse six consecutive quarters of declining same-store sales. His strategy centers on revamping cafes with more seating and electrical outlets to encourage longer visits. Still, the changes haven’t meaningfully boosted financial results, and this marks the second round of layoffs under his tenure.

Shares rose less than 1% in premarket trading Thursday, though they remain down 8% year-to-date versus a 13% gain in the S&P 500 Index.

Most recently, Starbucks posted weaker-than-expected sales and profit for the fiscal third quarter. The chain is also contending with stiffer competition in the US and China from smaller rivals offering cheaper drinks at faster speeds.

In response, Starbucks is streamlining its menu to cut complexity and wait times while making room for new items tailored to shifting tastes. The company has expanded sugar-free offerings and introduced protein-infused beverages as customers seek healthier choices.

While analysts and investors broadly back the turnaround plan, they have grown cautious about its cost and timeline. Profitability worsened last quarter due to spending on brand revitalization.

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3. Accenture Sees US Federal Spending Cuts Weighing on Growth Despite Strong Q4

Accenture Plc said Thursday that expected cuts in US federal consulting budgets will slow its growth next year, even as the firm reported stronger-than-forecast fourth-quarter revenue.

The consultancy projects a 1% to 1.5% hit to revenue during the fiscal year ending August 2026 due to weakness in its US federal business. Excluding that drag, it expects growth of 3% to 6%.

Accenture also announced plans to return at least $9.3billion to shareholders in the coming year, roughly $1billion more than last year. The firm had warned that President Donald Trump’s drive to curb government spending on consulting firms would weigh on its business, and shares had dropped about 30% in the past year leading up to Thursday’s results.

In Q4, however, revenue rose to $17.6billion, above the $17.4billion consensus estimate. CEO Julie Sweet said full-year revenue grew 7% to $69.7billion, reflecting the company’s “unique ability to deliver for our clients as they seek our help to reinvent and lead with AI.”

Accenture also plans to expand headcount across the US, Europe and other markets, citing strong client demand. The firm has been actively training its workforce to adopt more AI tools. Sweet told Bloomberg Television earlier this month that Accenture has begun teaching its 700,000-plus employees to use “agentic AI,” designed to autonomously complete tasks alongside human workers.

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4. Microsoft Adds Anthropic Models to Copilot, Broadening AI Partnerships

Microsoft Corp. said it will begin integrating artificial intelligence models from Anthropic into its Copilot-branded workplace assistant, expanding beyond its heavy reliance on OpenAI.

Starting Wednesday, business users will be able to switch between OpenAI and Anthropic models for certain functions, including research support and the creation of custom AI tools. Anthropic, founded by former OpenAI employees, has emerged as one of OpenAI’s largest competitors and a significant player in the AI industry.

Microsoft has secured a leading role in workplace AI largely through its partnership with OpenAI, which granted the company rights to embed OpenAI tools in its products in return for major investment and data center resources. While those models still underpin Copilot tools such as Microsoft 365 Copilot and the coding assistant, Microsoft is revising its OpenAI relationship and working on stronger in-house models.

In the three years since ChatGPT’s debut, AI models have multiplied, with cloud providers racing to host offerings from multiple companies so clients can toggle among services.

Claude Opus 4.1, Anthropic’s model built for complex reasoning, will be available in Microsoft 365 Copilot’s Researcher tool and Copilot Studio, which helps users build AI agents. Copilot Studio will also support Claude Sonnet 4, a lighter model. OpenAI models will remain accessible, Microsoft said.

“This move advances our commitment to bring the best AI innovation from across the industry to Microsoft 365 Copilot,” Charles Lamanna, president of business and industry Copilot at Microsoft, wrote in a blog post.

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5. Top US Business Schools Retreat From Diversity Partnerships Amid Policy Shifts

In the wake of George Floyd’s murder, elite US business schools leaned on the Consortium for Graduate Study in Management to strengthen diversity commitments. Founded in 1966, the group streamlines applications and reduces fees for underrepresented minorities. Participation has grown rapidly, with 25 schools involved for fall 2024 enrollment and a record 854 students recruited.

But for the fall 2026 admissions cycle, participation fell to 24 schools. The University of Texas at Austin’s McCombs School of Business said it would exit due to “changes in state and federal policies.” Soon after, the University of Virginia’s Darden School paused its involvement, citing “heightened scrutiny” of its programs. By mid-August, Chicago Booth and Northwestern Kellogg—two of the most recent additions—also disappeared from the Consortium’s website. Booth had been a member for barely a year.

The retrenchment extends beyond the Consortium. Other organizations supporting underrepresented students and women, such as Prospanica, Management Leadership for Tomorrow, and the Forté Foundation, are also facing setbacks. The federal government’s tougher stance against diversity in education—part of a broader campaign targeting universities through budget cuts, restrictions on international students, and opposition to “woke ideology”—has driven schools to scale back in ways not previously reported.

Booth has dropped nearly all of its diversity partnerships, Kellogg appears to have pared back many of its own, and institutions such as Harvard Business School and Wharton have also severed ties. The shift highlights mounting pressure on US business schools’ diversity initiatives.

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6. Nearly One-Third of Student Loan Borrowers Are Delinquent

Roughly 29% of federal student loan borrowers — about 5.4 million people — were at least 90 days past due on their payments in June, according to new TransUnion data. That’s only slightly below the record 31% delinquency rate reached in April.

Americans hold $1.7 trillion in student debt, and with pandemic-era forbearance now ended, the Department of Education has resumed collections. Many borrowers, however, have not resumed payments — some due to financial hardship, others as a form of protest. Michele Raneri, vice president of research at TransUnion, said the modest drop in delinquencies reflects more borrowers realizing the consequences, such as direct communication from loan servicers or declines in their credit scores. On average, a delinquency lowers a score by 60 points, while those with super-prime scores above 781 have seen drops of more than 170 points.

Borrowers who go 270 days without making payments will enter default, triggering involuntary federal collections like wage garnishment or tax refund withholding.

Currently, only 0.6% of borrowers are in default, but that number is expected to climb in the coming months. Raneri noted that some borrowers could begin seeing their tax refunds withheld early next year.

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7. Intel Explores Potential Apple Investment to Aid Comeback Effort

Intel Corp. has approached Apple Inc. about a possible investment as part of efforts to revive its struggling business, according to people familiar with the matter. The two companies have also held preliminary discussions about closer collaboration, though no deal is assured at this stage.

The talks follow a $5billion investment from Nvidia Corp. last week to jointly develop chips for PCs and data centers, and a $2billion investment from SoftBank Group Corp. in August. Intel is also in contact with other firms about potential partnerships and funding.

An investment from Apple would represent a significant endorsement of Intel’s turnaround bid. Apple, once a major Intel customer, has shifted entirely to its own processors over the past five years, with advanced chips produced by Taiwan Semiconductor Manufacturing Co. As such, a return to Intel chips in Apple devices remains highly unlikely.

Intel CEO Lip-Bu Tan is pursuing a comeback backed by the US government. In August, the Trump administration brokered an unusual deal that gave the federal government about a 10% stake in Intel, framing the company as essential to restoring US semiconductor leadership.

Despite government support, Intel faces steep challenges: it has lost its long-standing technology lead to rivals like Advanced Micro Devices Inc. and failed to capture much of the booming AI chip market dominated by Nvidia. The company has also cut jobs and delayed factory expansion amid financial strain.

Still, sentiment has improved since the government’s investment, with Intel shares climbing more than 50% since early August.

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