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    Amazon Union Group, Challenging Christian Smalls, Seeks Vote

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    A split over the stewardship of the union’s high-profile president, Christian Smalls, has led a rival faction to file a lawsuit seeking an election.A dissident group within the Amazon Labor Union, the only certified union in the country representing Amazon employees, filed a complaint in federal court Monday seeking to force the union to hold a leadership election.The union won an election at a Staten Island warehouse with more than 8,000 employees in April 2022, but Amazon has challenged the result and has yet to begin bargaining on a contract.The rise of the dissident group, which calls itself the A.L.U. Democratic Reform Caucus and includes a co-founder and former treasurer of the union, reflects a growing split within the union that appears to have undermined its ability to pressure Amazon. The split has also threatened to sap the broader labor movement of the momentum generated by last year’s high-profile victory.In its complaint, the reform caucus argues that the union and its president, Christian Smalls, illegally “refuse to hold officer elections which should have been scheduled no later than March 2023.”The complaint asks a federal judge to schedule an election of the union’s top officers for no later than Aug. 30 and to appoint a neutral monitor to oversee the election.Mr. Smalls said in a text message Monday that the complaint was “a ridiculous claim with zero facts or merit,” and a law firm representing the union said it would seek legal sanctions against the reform group’s lawyer if the complaint was filed.The complaint states that under an earlier version of the union’s constitution, a leadership election was required within 60 days of the National Labor Relations Board’s certification of its victory.But in December, the month before the labor board certification, the union’s leadership presented a new constitution to the membership that scheduled elections after the union ratifies a contract with Amazon — an accomplishment that could take years, if it happens at all.On Friday, the reform caucus sent the union’s leadership a letter laying out its proposal to hold prompt elections, saying it would go to court Monday if the leadership didn’t embrace the proposal.The reform group is made of up more than 40 active organizers who are also plaintiffs in the legal complaint, including Connor Spence, a union co-founder and former treasurer; Brett Daniels, the union’s former organizing director; and Brima Sylla, a prominent organizer at the Staten Island warehouse.The group said in its letter that enacting the proposal could “mean the difference between an A.L.U. which is strong, effective, and a beacon of democracy in the labor movement” and “an A.L.U. which, in the end, became exactly what Amazon warned workers it would become: a business that takes away the workers’ voices.”Mr. Smalls said in his text that the union leadership had worked closely with its law firm to ensure that its actions were legal, as well as with the U.S. Labor Department.Jeanne Mirer, a lawyer for the union, wrote to a lawyer for the reform caucus that the lawsuit was frivolous and based on falsehoods. She said that Mr. Spence had “improperly and unilaterally” replaced the union’s founding constitution with a revised version in June 2022, and that the revision, which called for elections after certification, had never been formally adopted by the union’s board.Retu Singla, another lawyer for the union, said in an interview that the constitution was never made final because there were disagreements about it within the union’s leadership.Mr. Spence said he and other members of the union’s board had revised the constitution while consulting extensively with the union’s lawyers. A second union official involved in the discussions corroborated his account.The split within the union dates from last fall, when several longtime Amazon Labor Union organizers became frustrated with Mr. Smalls after a lopsided loss in a union election at an Amazon warehouse near Albany, N.Y.In a meeting shortly after the election, organizers argued that control of the union rested in too few hands and that the leadership should be elected, giving rank-and-file workers more input.The skeptics also complained that Mr. Smalls was committing the union to elections without a plan for how to win them, and that the union needed a better process for determining which organizing efforts to support. Many organizers worried that Mr. Smalls spent too much time traveling the country to make public appearances rather than focus on the contract fight on Staten Island.Mr. Smalls later said in an interview that his travel was necessary to help raise money for the union and that the critics’ preferred approach — building up worker support for a potential strike that could bring Amazon to the bargaining table — was counterproductive because it could alarm workers who feared losing their livelihoods.He said a worker-led movement shouldn’t turn its back on workers at other warehouses if they sought to unionize. A top union official hired by Mr. Smalls also argued that holding an election before the union had a more systematic way of reaching out to workers would be undemocratic because only the most committed activists would vote.When Mr. Smalls unveiled the new union constitution in December, scheduling elections after a contract was ratified, many of the skeptics walked out. The two factions have operated independently this year, with both sides holding regular meetings with members.In April, the reform caucus began circulating a petition among workers at the Staten Island warehouse calling on the leadership to amend the constitution and hold prompt elections. The petition has been signed by hundreds of workers at the facility.The petition soon became a point of tension with Mr. Smalls. In an exchange with a member of the reform caucus on WhatsApp in early May, copies of which are included in Monday’s legal complaint, Mr. Smalls said the union would “take legal action against you” if the caucus did not abandon the petition.The tensions appeared to ease later that month after the union leadership under Mr. Smalls proposed that the two sides enter mediation. The reform caucus accepted the invitation and suspended the petition campaign.But according to a memo that the mediator, Bill Fletcher Jr., sent both sides on June 29 and that was viewed by The New York Times, the union leadership backed out of the mediation process on June 18 without explanation.“I am concerned that the apparent turmoil within the ALU E. Board means that little is being done to organize the workers and prepare for the battle with Amazon,” Mr. Fletcher wrote in the memo, referring to the union’s executive board. “This situation seriously weakens support among the workers.”Colin Moynihan More

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    As Businesses Clamor for Workplace A.I., Tech Companies Rush to Provide It

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    Amazon, Box, Salesforce, Oracle and others have recently rolled out A.I.-related products to help workplaces become more efficient and productive.Earlier this year, Mark Austin, the vice president of data science at AT&T, noticed that some of the company’s developers had started using the ChatGPT chatbot at work. When the developers got stuck, they asked ChatGPT to explain, fix or hone their code.It seemed to be a game-changer, Mr. Austin said. But since ChatGPT is a publicly available tool, he wondered if it was secure for businesses to use.So in January, AT&T tried a product from Microsoft called Azure OpenAI Services that lets businesses build their own A.I.-powered chatbots. AT&T used it to create a proprietary A.I. assistant, Ask AT&T, which helps its developers automate their coding process. AT&T’s customer service representatives also began using the chatbot to help summarize their calls, among other tasks.“Once they realize what it can do, they love it,” Mr. Austin said. Forms that once took hours to complete needed only two minutes with Ask AT&T so employees could focus on more complicated tasks, he said, and developers who used the chatbot increased their productivity by 20 to 50 percent.AT&T is one of many businesses eager to find ways to tap the power of generative artificial intelligence, the technology that powers chatbots and that has gripped Silicon Valley with excitement in recent months. Generative A.I. can produce its own text, photos and video in response to prompts, capabilities that can help automate tasks such as taking meeting minutes and cut down on paperwork.To meet this new demand, tech companies are racing to introduce products for businesses that incorporate generative A.I. Over the past three months, Amazon, Box and Cisco have unveiled plans for generative A.I.-powered products that produce code, analyze documents and summarize meetings. Salesforce also recently rolled out generative A.I. products used in sales, marketing and its Slack messaging service, while Oracle announced a new A.I. feature for human resources teams.These companies are also investing more in A.I. development. In May, Oracle and Salesforce Ventures, the venture capital arm of Salesforce, invested in Cohere, a Toronto start-up focused on generative A.I. for business use. Oracle is also reselling Cohere’s technology.Salesforce recently rolled out generative A.I. products used in sales, marketing and its Slack messaging service.Jeenah Moon for The New York Times“I think this is a complete breakthrough in enterprise software,” Aaron Levie, chief executive of Box, said of generative A.I. He called it “this incredibly exciting opportunity where, for the first time ever, you can actually start to understand what’s inside of your data in a way that wasn’t possible before.”Many of these tech companies are following Microsoft, which has invested $13 billion in OpenAI, the maker of ChatGPT. In January, Microsoft made Azure OpenAI Service available to customers, who can then access OpenAI’s technology to build their own versions of ChatGPT. As of May, the service had 4,500 customers, said John Montgomery, a Microsoft corporate vice president.Aaron Levie, chief executive of Box, said generative A.I. creates “a complete breakthrough in enterprise software.”Michael Short/BloombergFor the most part, tech companies are now rolling out four kinds of generative A.I. products for businesses: features and services that generate code for software engineers, create new content such as sales emails and product descriptions for marketing teams, search company data to answer employee questions, and summarize meeting notes and lengthy documents.“It is going to be a tool that is used by people to accomplish what they are already doing,” said Bern Elliot, a vice president and analyst at the I.T. research and consulting firm Gartner.But using generative A.I. in workplaces has risks. Chatbots can produce inaccuracies and misinformation, provide inappropriate responses and leak data. A.I. remains largely unregulated.In response to these issues, tech companies have taken some steps. To prevent data leakage and to enhance security, some have engineered generative A.I. products so they do not keep a customer’s data.When Salesforce last month introduced AI Cloud, a service with nine generative A.I.-powered products for businesses, the company included a “trust layer” to help mask sensitive corporate information to stop leaks and promised that what users typed into these products would not be used to retrain the underlying A.I. model.Similarly, Oracle said that customer data would be kept in a secure environment while training its A.I. model and added that it would not be able to see the information.Salesforce offers AI Cloud starting at $360,000 annually, with the cost rising depending on the amount of usage. Microsoft charges for Azure OpenAI Service based on the version of OpenAI technology that a customer chooses, as well as the amount of usage.For now, generative A.I. is used mainly in workplace scenarios that carry low risks — instead of highly regulated industries — with a human in the loop, said Beena Ammanath, the executive director of the Deloitte A.I. Institute, a research center of the consulting firm. A recent Gartner survey of 43 companies found that over half the respondents have no internal policy on generative A.I.“It is not just about being able to use these new tools efficiently, but it is also about preparing your work force for the new kinds of work that might evolve,” Ms. Ammanath said. “There is going to be new skills needed.”Panasonic Connect began using Microsoft’s Azure OpenAI Service to make its own chatbot in February.Panasonic ConnectPanasonic Connect, part of the Japanese electronics company Panasonic, began using Microsoft’s Azure OpenAI Service to make its own chatbot in February. Today, its employees ask the chatbot 5,000 questions a day about everything from drafting emails to writing code.While Panasonic Connect had expected its engineers to be the main users of the chatbot, other departments — such as legal, accounting and quality assurance — also turned to it to help summarize legal documents, brainstorm solutions to improve product quality and other tasks, said Judah Reynolds, Panasonic Connect’s marketing and communications chief.“Everyone started using it in ways that we didn’t even foresee ourselves,” he said. “So people are really taking advantage of it.” More

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    Remote Work Gives Amazon Workers a Common Cause

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    At Amazon, warehouse workers have shown support for corporate colleagues, noting they have nothing to gain if office workers lose flexibility that the pandemic proved possible.Eric Deshawn Lerma felt waves of anxiety when he sat down to tally the new costs in his routine since Amazon’s return to the office this spring. There’s parking. There’s fuel. There’s lunch. They add up to at least $200 extra a month, all to support a policy whose justification he can’t fully understand — after three years in which he and his teammates have been doing their jobs from home.Still, when Mr. Lerma heard that some of his colleagues were organizing a walkout to protest the return-to-office policy, which asks employees to come in at least three days a week, he initially wavered on whether to participate. After all, he realizes that thousands of Amazon workers have no flexibility to work from home. Their jobs require them to go into warehouses to do physically taxing labor each day.“It really provided me with a sense of internal conflict about working from home being a luxury or a right,” said Mr. Lerma, 27, who is an executive assistant in Seattle and joined the company, where he feels he has grown personally and professionally, in 2022. “There are different rights and amenities afforded to my role.”He ultimately decided, though, that he would probably join virtually. “While warehouse workers have much harsher working conditions than I do,” he said, “I should still be able to reserve the right to protect my autonomy as an employee.”Thousands of corporate employees, across industries, who remain adamant that they do not want to return to the office are now confronting a tension: How do their demands compare with those of the millions of workers whose jobs have never permitted them the ease of remote work? And can a corporate employee’s advocacy be of use to workers, including those trying to unionize, outside the corporate sphere?This tension follows a pandemic that exacerbated the divide between white-collar workers who could do their jobs from the safety of their homes and workers who often could not and were exposed to higher Covid risks.Simultaneously, workers in both the corporate and noncorporate realms have re-evaluated their working conditions, quit their jobs in waves and called for higher wages, amid a tight labor market at one point called a “workers economy.” The unemployment rate this spring has remained low, at 3.4 percent, with wages rising.Most Amazon workers have been working at company facilities throughout the pandemic.Hiroko Masuike/The New York TimesAt Amazon, hundreds of corporate employees plan to walk off the job on Wednesday, for one hour during lunchtime, in protest of the company’s return-to-office rule, among other issues including layoffs and the company’s impact on the climate. Weeks earlier, employees voiced their frustrations with the R.T.O. policy in a Remote Advocacy channel, with over 30,000 members, on the Slack workplace messaging system.The company has more than 350,000 corporate and tech employees globally. More than 800 in Seattle and 1,600 globally have pledged to participate in the walkout. Some employees, particularly working parents, pin some of their frustration to the financial toll of returning to the office, especially the cost and pressures of child care.The vast majority of Amazon’s more than one million workers, including those who formed a union at a Staten Island warehouse, have been working in person throughout the pandemic.Apple, where employees issued open letters protesting in-person work, and at the Gap have encountered a similar dynamic. At Starbucks, more than 70 named employees, along with others who remained anonymous, released a petition this year urging the company to permit them to keep working remotely. Members of the union representing Starbucks baristas have been supportive of these corporate workers, even though most of the company’s roughly 250,000 U.S. employees, including those across more than 300 unionized stores, cannot work from home.Indeed, many workers in warehouses and stores have been quick to show support for their corporate colleagues, noting that they have nothing to gain from seeing office workers lose out on the flexibility that the pandemic proved was possible.“The work that we’re doing is in two separate fields,” said Anna Ortega, 23, who is active in Inland Empire Amazon Workers United, a group of warehouse workers, and has been working at an Amazon facility in San Bernardino, Calif., for almost two years. “It’s just showing us that Amazon has a problem with workers and listening to us.”Ms. Ortega spends her days lifting 50-pound packages — a task she could never do from home. But she said she supported the Amazon workers who were asking for the flexibility to keep working remotely.“If your employees are happy and are able to work productively from home, I think they would be able to bring better results,” Ms. Ortega said.An Amazon spokesman, Brad Glasser, said that the company respected “employees’ rights to express their opinions and peacefully assemble,” but that it had felt “good energy” since more employees returned to the office.Members of a union representing Starbucks store staff have offered support to corporate employees who petitioned in favor of remote work.Audra Melton for The New York TimesAt Starbucks, members of the union representing store workers have corresponded with corporate employees on Discord and other platforms, offering their support. And when corporate employees released their petition, they asked the company both to reverse its return-to-office policy and to allow free and fair union elections across stores.Jake Sklarew, 34, a software engineer at Starbucks who signed the petition, was frustrated by the return-to-office policy because during the pandemic he had bought a home in an affordable area, 30 miles from the office, thinking he’d be able to keep working remotely. Earlier in his career, when he worked in restaurants, he commuted as much as three hours a day, and he sees his current calls for fairer company policies as connected to the struggles of baristas demanding workplace respect.“The people that are working in stores, when you talk to them, they’re not asking for other people to have to work in person,” he said, adding that it wouldn’t make sense for Starbucks to end remote work for some just because not everyone can do it. “It feels to me like kind of an eye-for-an-eye situation: You’re not helping anyone — you’re just hurting everyone.”Starbucks has suggested that its policy, which requires its 3,750 corporate workers to come in three days a week, contains an element of equity for its employees, or “partners,” because “many partners didn’t have the privilege of working remotely.” But some union members have rejected this logic.To Sarah Pappin, 32, a Starbucks shift supervisor in Seattle, what corporate employees are asking for is directly related to what store employees are demanding, such as increased Covid safety protections.“Even jobs that you might think of as dream jobs can be exploited,” she said. “I think there is a growing understanding that we’re all workers.”But that sense of solidarity doesn’t erase the guilt that some office workers feel as they ask to hold on to the freedom of a workday in their living room. Many office workers have realized, too, all the advantages they have even in their organizing efforts.“We’re so much closer to leadership,” Mr. Lerma said. “I have access to a work-issued laptop that has provided me with the complete address book of everyone within Amazon. I have access to Slack, which can give me any contact I want. A warehouse employee doesn’t have that luxury.” More

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    Amazon Union Prevails in Ruling on Warehouse Access for Organizing

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    Federal labor regulators said that Amazon had illegally barred off-duty employees from work sites and that the policy was aimed at union backers.Federal labor regulators have concluded that Amazon’s policy of restricting the warehouse access of off-duty employees is illegal, backing a contention of the union that has represented workers at a Staten Island warehouse since winning an election there last year.In a written communication sent to the union on Wednesday, a lawyer for the National Labor Relations Board’s Brooklyn region, Brent E. Childerhose, said the regional office had determined that the company broke the law by adopting the access rule last summer in response to union activity, and that it had applied the rule in a discriminatory fashion against union supporters.The Amazon Labor Union contends that the access policy makes it difficult for workers to exercise their right to talk to co-workers about joining or supporting a union.An Amazon spokeswoman, Mary Kate Paradis, said that the company had adopted the rule to protect employee safety and building security, and that it applied the rule fairly and in a way that “has nothing to do with whether an individual supports a particular cause or group.” Employees continue to have access to nonwork areas outside company buildings, she said.Portions of the case will go to a trial before an administrative law judge unless Amazon settles it beforehand. The losing side can appeal the judge’s decision to the labor board in Washington. A lawyer for the union, Seth Goldstein, said that if the labor board prevailed, Amazon might have to roll back the off-duty-access policy at warehouses around the country. The labor board did not immediately respond to a query about the potential impact.The board also said the company had illegally failed to bargain with the union. An N.L.R.B. regional director certified the result in January, but the company is appealing the outcome to the labor board in Washington.The Amazon spokeswoman said it wouldn’t make sense to negotiate changes to how the company operated at the site while Amazon continued to challenge the election’s validity.Amazon has traditionally forbidden workers to remain inside its warehouses, including break rooms, if they are not within 15 minutes of their shift. But the labor board reached a settlement with the company to ease the policy nationally in late 2021, as the union campaign at the Staten Island warehouse, known as JFK8, was gaining momentum.Union organizers attribute their election victory at JFK8 partly to the ability of off-duty employees to talk to co-workers and distribute food and union material in break rooms. They say the loss of such access last summer, not long after their victory, made it far more difficult to reach workers at the warehouse and try to enlist them in a pressure campaign to bring Amazon to the bargaining table.Under the settlement, Amazon was allowed to reinstitute a more restrictive policy after a few months, but the labor board contends that the manner in which it did so was discriminatory and therefore illegal. More

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    Judge Finds Amazon Broke Labor Law in Anti-Union Effort

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    The ruling, on charges brought by the National Labor Relations Board, involved actions at two Staten Island warehouses before union votes last year.Amazon violated labor law in advance of unionization elections last year at two warehouses on Staten Island, a federal administrative judge has ruled.The judge, who hears cases for the National Labor Relations Board, ruled on Monday that Amazon supervisors had illegally threatened to withhold wage and benefit increases from employees at the warehouses if they voted to unionize. The judge, Benjamin W. Green, also ruled that Amazon had illegally removed posts on a digital message board from an employee inviting co-workers to sign a petition being circulated by the Amazon Labor Union. The union sought to represent workers at both warehouses.The ruling ordered Amazon to stop the unfair labor practices and to post a notice saying it would not engage in them.In the same ruling, the judge dismissed several accusations brought in a complaint by the labor board’s prosecutors, including charges that Amazon indicated take-home pay would fall if workers unionized; that Amazon promised improvements in a program that subsidizes workers’ educational expenses if they chose not to unionize; and that Amazon indicated that workers would be fired if they unionized and failed to pay union dues.The judge found that these accusations were either overstated or, in the final instance, that the action was not illegal.Amazon can appeal the ruling to the labor board in Washington.“We’re glad that the judge dismissed 19 — nearly all — of the allegations in this case,” Mary Kate Paradis, an Amazon spokeswoman, said in a statement, adding: “The facts continue to show that the teams in our buildings work hard to do the right thing.”The union declined to comment.The violations occurred at a vast Amazon warehouse known as JFK8, where workers voted to unionize in an election whose results were announced in April, and at a smaller, nearby warehouse known as LDJ5, where workers voted down a union the next month.In the weeks before the elections, Amazon summoned employees at the warehouses to dozens of anti-union meetings at which supervisors questioned the credibility of the Amazon Labor Union, emphasized the costliness of union dues and warned that workers could end up worse off under a union.The judge’s ruling set aside a broader question brought by labor board prosecutors: whether employers can force workers to attend such meetings.The meetings are legal under labor board precedent and common among employers facing union campaigns. But the board’s general counsel, Jennifer Abruzzo, has argued that the precedent is in tension with federal labor law and had sought to challenge it.Judge Green concluded that he lacked the authority to overturn the precedent. “I am required to apply current law,” he wrote. Ms. Abruzzo’s office can file an appeal asking the labor board in Washington to overturn the precedent. More

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    Tech Layoffs Continue as Shares Fall and Interest Rates Rise

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    Eighteen months ago, the online used car retailer Carvana had such great prospects that it was worth $80 billion. Now it is valued at less than $1.5 billion, a 98 percent plunge, and is struggling to survive.Many other tech companies are also seeing their fortunes reverse and their dreams dim. They are shedding employees, cutting back, watching their financial valuations shrivel — even as the larger economy chugs along with a low unemployment rate and a 3.2 percent annualized growth rate in the third quarter.One largely unacknowledged explanation: An unprecedented era of rock-bottom interest rates has abruptly ended. Money is no longer virtually free.For over a decade, investors desperate for returns sent their money to Silicon Valley, which pumped it into a wide range of start-ups that might not have received a nod in less heady times. Extreme valuations made it easy to issue stock or take on loans to expand aggressively or to offer sweet deals to potential customers that quickly boosted market share.It was a boom that seemed as if it would never end. Tech piled up victories, and its competitors wilted. Carvana built dozens of flashy car “vending machines” across the country, marketed itself relentlessly and offered very attractive prices for trade-ins.“The whole tech industry of the last 15 years was built by cheap money,” said Sam Abuelsamid, principal analyst with Guidehouse Insights. “Now they’re getting hit by a new reality, and they will pay the price.”Cheap money funded many of the acquisitions that substitute for organic growth in tech. Two years ago, as the pandemic raged and many office workers were confined to their homes, Salesforce bought the office communications tool Slack for $28 billion, a sum that some analysts thought was too high. Salesforce borrowed $10 billion to do the deal. This month, it said it was cutting 8,000 people, about 10 percent of its staff, many of them at Slack.Even the biggest tech companies are affected. Amazon was willing to lose money for years to acquire new customers. It is taking a different approach these days, laying off 18,000 office workers and shuttering operations that are not financially viable.Carvana, like many start-ups, pulled a page out of Amazon’s old playbook, trying to get big fast. Used cars, it believed, were a highly fragmented market ripe for reinvention, just the way taxis, bookstores and hotels had been. It strove to outdistance any competition.The company, based in Tempe, Ariz., wanted to replace traditional dealers with, Carvana said grandly, “technology and exceptional customer service.” In what seemed to symbolize the death of the old way of doing things, it paid $22 million for a six-acre site in Mission Valley, Calif., that a Mazda dealer had occupied since 1965.More on Big TechLayoffs: Some of the biggest tech companies, including Alphabet and Microsoft, have recently announced tens of thousands of job cuts. But even after the layoffs, their work forces are still behemoths.A Generational Divide: The industry’s recent job cuts have been eye-opening to young workers. But to older employees who experienced the dot-com bust, it has hardly been a shock.Supreme Court Cases: The justices are poised to reconsider two crucial tenets of online speech under which social media networks have long operated.In the Netherlands: Dutch government and educational organizations have spurred changes at Google, Microsoft and Zoom, using a European data protection law as a lever.Where traditional dealerships were literally flat, Carvana built multistory car vending machines that became memorable local landmarks. Customers picked up their cars at these towers, which now total 33. A corporate video of the building of one vending machine has over four million views on YouTube.In the third quarter of 2021, Carvana delivered 110,000 cars to customers, up 74 percent from 2020. The goal: two million cars a year, which would make it by far the largest used car retailer.An eye-catching Carvana car vending machine in Uniondale, N.Y.Tony Cenicola/The New York TimesThen, even more quickly than the company grew, it fell apart. When used car sales rose more than 25 percent in the first year of the pandemic, that created a supply problem: Carvana needed many more vehicles. It acquired a car auction company for $2.2 billion and took on even more debt at a premium interest rate. And it paid customers handsomely for cars.But as the pandemic waned and interest rates began to rise, sales slowed. Carvana, which declined to comment for this article, did a round of layoffs in May and another in November. Its chief executive, Ernie Garcia, blamed the higher cost of financing, saying, “We failed to accurately predict how all this will play out.”Some competitors are even worse off. Vroom, a Houston company, has seen its stock fall to $1 from $65 in mid-2020. Over the past year, it has dismissed half of its employees.“High rates are painful for almost everyone, but they are particularly painful for Silicon Valley,” said Kairong Xiao, an associate professor of finance at Columbia Business School. “I expect more layoffs and investment cuts unless the Fed reverses its tightening.”At the moment, there is little likelihood of that. The market expects two more rate increases by the Federal Reserve this year, to at least 5 percent.In real estate, that is trouble for anyone expecting a quick recovery. Low rates not only pushed up house prices but also made it irresistible for companies such as Zillow as well as Redfin, Opendoor Technologies and others, to get into a business that used to be considered slightly disreputable: flipping houses.In 2019, Zillow estimated it would soon have revenue of $20 billion from selling 5,000 houses a month. That thrilled investors, who pushed the publicly traded Seattle company to a $45 billion valuation and created a hiring boom that raised the number of employees to 8,000.Zillow’s notion was to use artificial intelligence software to make a chaotic real estate market more efficient, predictable and profitable. This was the sort of innovation that the venture capitalist Marc Andreessen talked about in 2011 when he said digital insurgents would take over entire industries. “Software is eating the world,” he wrote.In June 2021, Zillow owned 50 homes in California’s capital, Sacramento. Five months later, it had 400. One was an unremarkable four-bedroom, three-bath house in the northwest corner of the city. Built in 2001, it is convenient to several parks and the airport. Zillow paid $700,000 for it.Zillow put the house on the market for months, but no one wanted it, even at $625,000. Last fall, after it had unceremoniously exited the flipping market, Zillow unloaded the house for $355,000. Low rates had made it seem possible that Zillow could shoot for the moon, but even they could not make it a success.Ryan Lundquist, a Sacramento appraiser who followed the house’s history closely on his blog, said Zillow realized real estate was fragmented but perhaps did not quite appreciate that houses were labor-intensive, deeply personal, one-to-one transactions.“This idea of being able to come in and change the game completely — that’s really difficult to do, and most of the time you don’t,” he said.Zillow’s market value has now shrunk to $10 billion, and its employee count to around 5,500 after two rounds of layoffs. It declined to comment.The dream of market domination through software dies hard, however. Zillow recently made a deal with Opendoor, an online real estate company in San Francisco that buys and sells residential properties and has also been ravaged by the downturn. Under the agreement, sellers on Zillow’s platform can request to have Opendoor make offers on their homes. Zillow said sellers would “save themselves the stress and uncertainty of a traditional sale process.”That partnership might explain why the buyer of that four-bedroom Sacramento house, one of the last in Zillow’s portfolio, was none other than Opendoor. It made some modest improvements and put the house on the market for $632,000, nearly twice what it had paid. A deal is pending.“If it were really this easy, everyone would be a flipper,” Mr. Lundquist said.An Amazon bookstore in Seattle in 2016. The store is now permanently closed.Kyle Johnson for The New York TimesThe easy money era had been well established when Amazon decided it had mastered e-commerce enough to take on the physical world. Its plans to expand into bookstores was a rumor for years and finally happened in 2015. The media went wild. According to one well-circulated story, the retailer planned to open as many as 400 bookstores.The company’s idea was that the stores would function as extensions of its online operation. Reader reviews would guide the potential buyer. Titles were displayed face out, so there were only 6,000 of them. The stores were showrooms for Amazon’s electronics.Being a showroom for the internet is expensive. Amazon had to hire booksellers and lease storefronts in popular areas. And letting enthusiastic reviews be one of the selection criteria meant stocking self-published titles, some of which were pumped up with reviews by the authors’ friends. These were not books that readers wanted.Amazon likes to try new things, and that costs money. It took on another $10 billion of long-term debt in the first nine months of the year at a higher rate of interest than it was paying two years ago. This month, it said it was borrowing $8 billion more. Its stock market valuation has shrunk by about a trillion dollars.The retailer closed 68 stores last March, including not only bookstores but also pop-ups and so-called four-star stores. It continues to operate its Whole Foods grocery subsidiary, which has 500 U.S. locations, and other food stores. Amazon said in a statement that it was “committed to building great, long-term physical retail experiences and technologies.”Traditional book selling, where expectations are modest, may have an easier path now. Barnes & Noble, the bricks-and-mortar chain recently deemed all but dead, has moved into two former Amazon locations in Massachusetts, putting about 20,000 titles into each. The chain said the stores were doing “very well.” It is scouting other former Amazon locations.“Amazon did a very different bookstore than we’re doing,” said Janine Flanigan, Barnes & Noble’s director of store planning and design. “Our focus is books.” More

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    For Tech Companies, Years of Easy Money Yield to Hard Times

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    Eighteen months ago, the online used car retailer Carvana had such great prospects that it was worth $80 billion. Now it is valued at less than $1.5 billion, a 98 percent plunge, and is struggling to survive.Many other tech companies are also seeing their fortunes reverse and their dreams dim. They are shedding employees, cutting back, watching their financial valuations shrivel — even as the larger economy chugs along with a low unemployment rate and a 3.2 annualized growth rate in the third quarter.One largely unacknowledged explanation: An unprecedented era of rock-bottom interest rates has abruptly ended. Money is no longer virtually free.For over a decade, investors desperate for returns sent their money to Silicon Valley, which pumped it into a wide range of start-ups that might not have received a nod in less heady times. Extreme valuations made it easy to issue stock or take on loans to expand aggressively or to offer sweet deals to potential customers that quickly boosted market share.It was a boom that seemed as if it would never end. Tech piled up victories, and its competitors wilted. Carvana built dozens of flashy car “vending machines” across the country, marketed itself relentlessly and offered very attractive prices for trade-ins.“The whole tech industry of the last 15 years was built by cheap money,” said Sam Abuelsamid, principal analyst with Guidehouse Insights. “Now they’re getting hit by a new reality, and they will pay the price.”Cheap money funded many of the acquisitions that substitute for organic growth in tech. Two years ago, as the pandemic raged and many office workers were confined to their homes, Salesforce bought the office communications tool Slack for $28 billion, a sum that some analysts thought was too high. Salesforce borrowed $10 billion to do the deal. This month, it said it was cutting 8,000 people, about 10 percent of its staff, many of them at Slack.Even the biggest tech companies are affected. Amazon was willing to lose money for years to acquire new customers. It is taking a different approach these days, laying off 18,000 office workers and shuttering operations that are not financially viable.Carvana, like many start-ups, pulled a page out of Amazon’s old playbook, trying to get big fast. Used cars, it believed, were a highly fragmented market ripe for reinvention, just the way taxis, bookstores and hotels had been. It strove to outdistance any competition.The company, based in Tempe, Ariz., wanted to replace traditional dealers with, Carvana said grandly, “technology and exceptional customer service.” In what seemed to symbolize the death of the old way of doing things, it paid $22 million for a six-acre site in Mission Valley, Calif., that a Mazda dealer had occupied since 1965.More on Big TechLayoffs: Some of the biggest tech companies, including Alphabet and Microsoft, have recently announced tens of thousands of job cuts. But even after the layoffs, their work forces are still behemoths.A Generational Divide: The industry’s recent job cuts have been eye-opening to young workers. But to older employees who experienced the dot-com bust, it has hardly been a shock.Supreme Court Cases: The justices are poised to reconsider two crucial tenets of online speech under which social media networks have long operated.In the Netherlands: Dutch government and educational organizations have spurred changes at Google, Microsoft and Zoom, using a European data protection law as a lever.Where traditional dealerships were literally flat, Carvana built multistory car vending machines that became memorable local landmarks. Customers picked up their cars at these towers, which now total 33. A corporate video of the building of one vending machine has over four million views on YouTube.In the third quarter of 2021, Carvana delivered 110,000 cars to customers, up 74 percent from 2020. The goal: two million cars a year, which would make it by far the largest used car retailer.An eye-catching Carvana car vending machine in Uniondale, N.Y.Tony Cenicola/The New York TimesThen, even more quickly than the company grew, it fell apart. When used car sales rose more than 25 percent in the first year of the pandemic, that created a supply problem: Carvana needed many more vehicles. It acquired a car auction company for $2.2 billion and took on even more debt at a premium interest rate. And it paid customers handsomely for cars.But as the pandemic waned and interest rates began to rise, sales slowed. Carvana, which declined to comment for this article, did a round of layoffs in May and another in November. Its chief executive, Ernie Garcia, blamed the higher cost of financing, saying, “We failed to accurately predict how all this will play out.”Some competitors are even worse off. Vroom, a Houston company, has seen its stock fall to $1 from $65 in mid-2020. Over the past year, it has dismissed half of its employees.“High rates are painful for almost everyone, but they are particularly painful for Silicon Valley,” said Kairong Xiao, an associate professor of finance at Columbia Business School. “I expect more layoffs and investment cuts unless the Fed reverses its tightening.”At the moment, there is little likelihood of that. The market expects two more rate increases by the Federal Reserve this year, to at least 5 percent.In real estate, that is trouble for anyone expecting a quick recovery. Low rates not only pushed up house prices but also made it irresistible for companies such as Zillow as well as Redfin, Opendoor Technologies and others, to get into a business that used to be considered slightly disreputable: flipping houses.In 2019, Zillow estimated it would soon have revenue of $20 billion from selling 5,000 houses a month. That thrilled investors, who pushed the publicly traded Seattle company to a $45 billion valuation and created a hiring boom that raised the number of employees to 8,000.Zillow’s notion was to use artificial intelligence software to make a chaotic real estate market more efficient, predictable and profitable. This was the sort of innovation that the venture capitalist Marc Andreessen talked about in 2011 when he said digital insurgents would take over entire industries. “Software is eating the world,” he wrote.In June 2021, Zillow owned 50 homes in California’s capital, Sacramento. Five months later, it had 400. One was an unremarkable four-bedroom, three-bath house in the northwest corner of the city. Built in 2001, it is convenient to several parks and the airport. Zillow paid $700,000 for it.Zillow put the house on the market for months, but no one wanted it, even at $625,000. Last fall, after it had unceremoniously exited the flipping market, Zillow unloaded the house for $355,000. Low rates had made it seem possible that Zillow could shoot for the moon, but even they could not make it a success.Ryan Lundquist, a Sacramento appraiser who followed the house’s history closely on his blog, said Zillow realized real estate was fragmented but perhaps did not quite appreciate that houses were labor-intensive, deeply personal, one-to-one transactions.“This idea of being able to come in and change the game completely — that’s really difficult to do, and most of the time you don’t,” he said.Zillow’s market value has now shrunk to $10 billion, and its employee count to around 5,500 after two rounds of layoffs. It declined to comment.The dream of market domination through software dies hard, however. Zillow recently made a deal with Opendoor, an online real estate company in San Francisco that buys and sells residential properties and has also been ravaged by the downturn. Under the agreement, sellers on Zillow’s platform can request to have Opendoor make offers on their homes. Zillow said sellers would “save themselves the stress and uncertainty of a traditional sale process.”That partnership might explain why the buyer of that four-bedroom Sacramento house, one of the last in Zillow’s portfolio, was none other than Opendoor. It made some modest improvements and put the house on the market for $632,000, nearly twice what it had paid. A deal is pending.“If it were really this easy, everyone would be a flipper,” Mr. Lundquist said.An Amazon bookstore in Seattle in 2016. The store is now permanently closed.Kyle Johnson for The New York TimesThe easy money era had been well established when Amazon decided it had mastered e-commerce enough to take on the physical world. Its plans to expand into bookstores was a rumor for years and finally happened in 2015. The media went wild. According to one well-circulated story, the retailer planned to open as many as 400 bookstores.The company’s idea was that the stores would function as extensions of its online operation. Reader reviews would guide the potential buyer. Titles were displayed face out, so there were only 6,000 of them. The stores were showrooms for Amazon’s electronics.Being a showroom for the internet is expensive. Amazon had to hire booksellers and lease storefronts in popular areas. And letting enthusiastic reviews be one of the selection criteria meant stocking self-published titles, some of which were pumped up with reviews by the authors’ friends. These were not books that readers wanted.Amazon likes to try new things, and that costs money. It took on another $10 billion of long-term debt in the first nine months of the year at a higher rate of interest than it was paying two years ago. This month, it said it was borrowing $8 billion more. Its stock market valuation has shrunk by about a trillion dollars.The retailer closed 68 stores last March, including not only bookstores but also pop-ups and so-called four-star stores. It continues to operate its Whole Foods grocery subsidiary, which has 500 U.S. locations, and other food stores. Amazon said in a statement that it was “committed to building great, long-term physical retail experiences and technologies.”Traditional book selling, where expectations are modest, may have an easier path now. Barnes & Noble, the bricks-and-mortar chain recently deemed all but dead, has moved into two former Amazon locations in Massachusetts, putting about 20,000 titles into each. The chain said the stores were doing “very well.” It is scouting other former Amazon locations.“Amazon did a very different bookstore than we’re doing,” said Janine Flanigan, Barnes & Noble’s director of store planning and design. “Our focus is books.” More

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    Computer Science Students Face a Shrinking Big Tech Job Market

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    A new reality is setting in for students and recent graduates who spent years honing themselves for careers at the largest tech companies.Ever since she was a 10th grader in Seattle, Annalice Ni wanted to develop software for a prominent tech company like Google. So she went to great lengths to meet the internship and other résumé criteria that make students attractive hires to the biggest tech firms.In high school, Ms. Ni took computer science courses, interned at Microsoft and volunteered as a coding teacher for younger students. She majored in computer science at the University of Washington, earning coveted software engineering internships at Facebook. After graduating from college this year, she moved to Silicon Valley to start her dream job as a software engineer at Meta, Facebook’s parent company.Then last month, Meta laid off more than 11,000 employees — including Ms. Ni.“I did feel very frustrated and disappointed and maybe a bit scared because all of a sudden, I didn’t know what to do,” Ms. Ni, 22, said of her unexpected career setback. “There’s not much I could have done, especially in college, more than I already did, better than I already did.”Over the last decade, the prospect of six-figure starting salaries, perks like free food and the chance to work on apps used by billions led young people to stampede toward computer science — the study of computer programming and processes like algorithms — on college campuses across the United States. The number of undergraduates majoring in the subject more than tripled from 2011 to 2021, to nearly 136,000 students, according to the Computing Research Association, which tracks computing degrees at about 200 universities.Ms. Ni spends her days interviewing for jobs and brushing up on her skills.Jason Henry for The New York TimesTech giants like Facebook, Google and Microsoft encouraged the computing education boom, promoting software jobs to students as a route to lucrative careers and the power to change the world.But now, layoffs, hiring freezes and planned recruiting slowdowns at Meta, Twitter, Alphabet, Amazon, DoorDash, Lyft, Snap and Stripe are sending shock waves through a generation of computer and data science students who spent years honing themselves for careers at the largest tech companies. Tech executives have blamed a faltering global economy for the jobs slowdown.The cutbacks have not only sent recent graduates scrambling to find new jobs but also created uncertainty for college students seeking high-paying summer internships at large consumer tech companies.In the past, tech companies used their internship programs to recruit promising job candidates, extending offers to many students to return as full-time employees after graduation. But this year, those opportunities are shrinking.Amazon, for instance, hired about 18,000 interns this year, paying some computer science students nearly $30,000 for the summer, not including housing stipends. The company is now considering reducing the number of interns for 2023 by more than half, said a person with knowledge of the program who was not authorized to speak publicly.More on Big TechMicrosoft: The company’s $69 billion deal for Activision Blizzard, which rests on winning the approval by 16 governments, has become a test for whether tech giants can buy companies amid a backlash.Apple: Apple’s largest iPhone factory, in the city of Zhengzhou, China, is dealing with a shortage of workers. Now, that plant is getting help from an unlikely source: the Chinese government.Amazon: The company appears set to lay off approximately 10,000 people in corporate and technology jobs, in what would be the largest cuts in the company’s history.Meta: The parent of Facebook said it was laying off more than 11,000 people, or about 13 percent of its work forceBrad Glasser, an Amazon spokesman, said the company was committed to its internship program and the real-word experience that it provided. A Meta spokeswoman referred to a letter to employees from Mark Zuckerberg, the company’s chief executive, announcing the company’s layoffs last month.Hiring plans are also changing at smaller tech firms. Roblox, the popular game platform, said it planned to hire 300 interns for next summer — almost twice as many as this year — and was expecting more than 50,000 applications for those spots. Redfin, which employed 38 interns this summer, said it had canceled the program for next year.There are still good jobs for computing students, and the field is growing. Between 2021 and 2031, employment for software developers and testers is expected to grow 25 percent, amounting to more than 411,000 new jobs, according to projections from the Bureau of Labor Statistics. But many of those jobs are in areas like finance and the automotive industry.“Students are still getting multiple job offers,” said Brent Winkelman, chief of staff for the computer science department at the University of Texas at Austin. “They just may not come from Meta, from Twitter or from Amazon. They’re going to come from places like G.M., Toyota or Lockheed.”College career centers have become sounding boards for anxious students on the cusp of entering the tech job market. In career counselors’ offices, the search for a Plan B has heightened.Some students are applying to lesser-known tech companies. Others are seeking tech jobs outside the industry, with retailers like Walmart or with government agencies and nonprofits. Graduate school is also an option.“This particular class has been a lot more savvy than previous classes,” said Hazel Raja, senior director of the career development office at Pomona College in Claremont, Calif. “Even those who have secured job offers, they’re still making sure they’re networking and staying engaged in campus recruiting opportunities.”Helen Dong, 21, a senior majoring in computer science at Carnegie Mellon University, interned at Meta twice, in 2021 and 2022. So she was surprised at the end of this summer, she said, when she did not receive a job offer from the company. Meta’s recent layoffs prompted her to apply for jobs outside tech, at automotive and financial companies. Last month, she posted videos on TikTok advising her peers to adjust their job expectations.Helen Dong, 21, a senior majoring in computing at Carnegie Mellon University, interned at Meta but did not receive a job offer. Now she is looking in the finance and automotive industries.Helen Dong“I chose to major in computer science so that I could get a ton of offers after college and make bank,” Ms. Dong joked in one TikTok, as she sang along to “Reduce Your Expectations to 0.” In this job market, she wrote at the bottom of the video, “be grateful with 1 offer.”In interviews, 10 college students and recent graduates said they were not prepared for a slowdown in jobs at the largest tech companies. Until recently, those companies were fiercely competing to hire computer science majors at top schools — with some students receiving multiple job offers with six-figure starting salaries and five-digit signing bonuses. An entire genre of TikTok videos had sprung up dedicated to young techies extolling their job perks and their annual compensation, with at least one highlighting a $198,000 package, complete with stock options and relocation expenses.Dozens of people who were recently laid off, or whose tech job offers were rescinded, have posted details of their plights on LinkedIn. To alert recruiters, some have added the hashtag #opentowork to their LinkedIn profile photos.Tony Shi, 23, who majored in computer science and business at Western University in London, Ontario, is one of them. After graduating this year, he began working as a product manager at Lyft in August. In November, the ride-hailing company laid off about 650 employees, including Mr. Shi.Now he is on a tight deadline to find a new job. Mr. Shi is Canadian, from Waterloo, Ontario, and obtained a visa to move to San Francisco for his job at Lyft. Under the visa, he has 60 days to find a new job. He said he had become more sensitive to the businesses and balance sheets of potential employers.“I need to be a little more risk-averse. I definitely don’t want to get laid off again,” he said. Instead of his taking a company for its word, he added, “now, the product needs to make a lot of sense.”Meta rescinded its job offer to Rachel Castellino, 22, weeks before she was scheduled to start work.Jason Henry for The New York TimesSome recent graduates did not get the chance to start their new tech jobs.Rachel Castellino, a statistics major at the California Polytechnic State University, worked to land a job at a major tech company. During college, she interned as a project manager at PayPal, received a data science fellowship funded by the National Science Foundation and founded a data science club at her school.Ms. Castellino, 22, knew she would have to grind to pass companies’ technical interviews, which typically involve solving programming problems. Last year, she spent much of the fall job hunting and preparing for coding assessments. For four days a week, from 8 a.m. to 4 p.m., she studied probability concepts and programming languages. Even so, she said, the interview process was brutal.In November 2021, Meta offered her a job as a data scientist, starting in December 2022. Last month, Meta rescinded the offer, she said.“I worked so hard for those interviews. It felt really good to earn something of a high caliber,” she said. “I had so much to look forward to.”The setback has been disheartening. “I was upset,” Ms. Castellino said. “It wasn’t good to hear.”As for Ms. Ni, she now views losing her dream job as an opportunity to broaden her career horizons. Over the last month, she has applied to midsize tech firms and start-ups that she finds innovative — potential employers she had not previously considered.“I’m exploring opportunities that I didn’t before,” Ms. Ni said. “I feel like I’ve already learned some things.”Karen Weise More