Europe bulletin: UK job cuts, France breaks gridlock, Tesla's steep fall

Europe started the week on a bruising note.

From Whitehall belt-tightening to Paris finally muscling a budget through gridlock, policymakers are choosing survival over ambition.

Markets are exhaling, but only briefly. Meanwhile, Tesla’s European brand damage looks structural, not cyclical, and Wall Street’s once-frothy obesity-drug trade is sobering up fast.

This bulletin cuts through the noise on jobs, politics, autos, and biotech, where momentum is fading, trade-offs are brutal, and optimism is getting repriced.

UK Treasury slashes 300 positions with £100k exit sweetener

Finance Minister Rachel Reeves is culling roughly 300 Treasury jobs, 14% of the department's 2,100-strong workforce, by 2030 through a voluntary exit scheme offering up to £100,000 ($136,790) in severance.

As per a report by Financial Times, the Treasury swollen to record size during Brexit and Covid chaos, is now right-sizing back to normal levels.

Compensation is calculated at three weeks' pay per service year, capped at 15 months' pay.

Up to 200 applicants will learn their package values by late February. Redundancies aren't off the table if voluntary departures fall short across London, Darlington, Norwich, and Edinburgh offices.

The cuts feed a wider government push to slash 16% of Whitehall's administrative costs by 2030, part of Starmer's efficiency drive.

France clinches 2026 budget after months of political stalemate

Prime Minister Sébastien Lecornu's government finally locked down France's 2026 budget Monday as two no-confidence motions collapsed, ending nearly two years of legislative gridlock.

The Socialists' backing proved decisive; they secured the suspension of an unpopular pension reform raising retirement age to 64, delaying it until after the 2027 presidential election.

The budget targets a 5% deficit from 5.4% in 2025, slashing spending by 9 billion euros while raising 14 billion through taxes on wealth and high earners.

Market relief is tangible: French borrowing costs versus German debt reverted to pre-snap-election levels last seen in June 2024.

Political analyst Alain Duhamel called it "a political triumph and an economic setback."

For Macron, struggling with historically low approval, it's breathing room before spring 2027, but real economic reform faces a frozen agenda as lawmakers prep for elections.

Tesla's European collapse deepens

Tesla's European woes worsened in January as registrations plummeted 44% year-over-year across five major markets, vindicating the brutal 27% annual slide in 2025.

France hit a three-year low of just 661 units, down 42%, while Norway, Tesla's sole European bright spot, cratered 88% to 83 cars as Jan. 1 tax incentive changes triggered a pull-forward wave.

Sweden and Denmark eked out gains but remain deeply depressed versus 2024 levels.

The American automaker's crisis stems from three vectors: product fatigue (aged Model Y lineup), brand toxicity (Musk's political endorsements alienating EU environmentalists), and relentless competition from Volkswagen and Chinese giant BYD.

What's insidious: industrywide EV registrations jumped 30% in 2025, yet Tesla lost share, signaling market rejection rather than category weakness.

Three consecutive years of decline, accelerating each cycle. This isn't cyclical, it's structural brand damage.

Obesity boom hits reality

Wall Street's $150 billion obesity-drug fantasy is collapsing.

Goldman Sachs just slashed peak forecasts to $105 billion (down from $130B), with Jefferies cutting deeper to $80 billion, as aggressive pricing, Novo and Lilly's GLP-1 drugs now start at $149-299/month on corporate sites versus $1,000 list price, erodes blockbuster projections.

The 2030 target has shifted to 2035 for some analysts as generic Ozempic launches and both drugmakers report quarterly earnings on Wednesday.

Novo likely faces 2026 sales decline guidance, while Lilly's expected to grow 21% revenue.

The tortured thesis: massive volume growth must offset price cannibalization, but prescription momentum (730,000 weekly Rx's as of late January) barely budged, Wegovy pills +4%, Zepbound +0.9%.

Oral medications launching throughout 2026 could extend therapy duration, but without velocity, consensus "stands on thin ice" per HSBC analyst Rajesh Kumar.