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    Silicon Valley’s Best Pandemic Ever

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    As the world reeled, tech titans supplied the tools that made life and work possible. Now the companies are awash in money — and questions about what it means to win amid so much loss.SAN FRANCISCO — In April 2020, with 2,000 Americans dying every day of Covid-19, Jeff Bezos, Amazon’s chief executive and the world’s richest man, announced he was focusing on people rather than profits. Amazon would spend about $4 billion in the next few months “providing for customers and protecting employees,” he said, wiping out the profit the retailer would have made without the virus.It was a typically bold Amazon announcement, a shrewd public relations move to sacrifice financial gain at a moment of misery and fear. Mr. Bezos said this was “the hardest time we’ve ever faced” and suggested the new approach would extend indefinitely. “If you’re a shareowner in Amazon,” he advised, “you may want to take a seat.”At the end of July 2020, Amazon announced quarterly results. Rather than earning zero, as Mr. Bezos had predicted, it notched an operating profit of $5.8 billion — a record for the company.The months since have established new records. Amazon’s margins, which measure the profit on every dollar of sales, are the highest in the history of the company, which is based in Seattle.After stepping aside as chief executive early this month, Mr. Bezos flew to suborbital space for 10 minutes this week. Upon returning, he expressed gratitude to those who had fulfilled this lifelong dream. “I want to thank every Amazon employee and every Amazon customer, ’cause you guys paid for all this,” he said.Mr. Bezos, who was not available for comment for this article, was the only chief executive of a tech company to enter zero gravity in his own spaceship in the past year. But Amazon’s pandemic triumph was echoed all over the world of technology companies.Even as 609,000 Americans have died and the Delta variant surges, as corporate bankruptcies hit a peak for the decade, as restaurants, airlines, gyms, conferences, museums, department stores, hotels, movie theaters and amusement parks shut down and as millions of workers found themselves unemployed, the tech industry flourished.The combined stock market valuation of Apple, Alphabet, Nvidia, Tesla, Microsoft, Amazon and Facebook increased by about 70 percent to more than $10 trillion. That is roughly the size of the entire U.S. stock market in 2002. Apple alone has enough cash in its coffers to give $600 to every person in the United States. And in the next week, the big tech companies are expected to report earnings that will eclipse all previous windfalls.Silicon Valley, still the world headquarters for tech start-ups, has never seen so much loot. More Valley companies went public in 2020 than in 2019, and they raised twice as much money when they did. Forbes calculates there are now 365 billionaires whose fortunes derive from tech, up from 241 before the virus.Silicon Valley made the tools that allowed Americans, and the American economy, to survive the pandemic. People got their jigsaw puzzles, air purifiers and digital thermometers delivered by Amazon instead of picking them up two blocks or two miles away. The consumer economy swerved from local to national.Tech is triumphant in a way that even its most evangelical leaders couldn’t have predicted. No single industry has ever had such power over American life, dominating how we communicate, shop, learn about the world and seek distraction and joy.What will Silicon Valley do with this power? Who if anyone might restrain tech, and how much support will they have? Wealth and the ability to command and control tend to produce hubris more than modesty. As algorithms and artificial intelligence rearrange people into marketing groups, it’s uncertain — to put it politely — how aware the tech industry is of the potential for abuse, especially when it generates profits.With the House Judiciary Committee’s recent vote to advance a series of bills that aim to reduce the power of the most dominant tech companies, and with President Biden appointing regulators who have sharp views of Big Tech, these issues are finally set for a wider debate.It has been a tumultuous 18 months, and even the tech companies are having trouble absorbing what happened.PayPal, the digital payments company, had 325 million active accounts before the pandemic. It reported 392 million in the first quarter. “The winds were blowing in our direction, but we had to set the sails,” said Dan Schulman, the chief executive.The wind was so strong it blew tech into another universe of wealth and influence.The Pandemic’s TailwindIn March 2020, Redfin shut down its 78 offices around the country. Its stock lost two-thirds of its value. Shortly after, demand for real estate started rising again. Jordan Strauss/Associated PressOn March 13, 2020, Glenn Kelman, the chief executive of the online real estate broker Redfin, was biking to work when he got a call from Henry Ellenbogen, a longtime investor in Redfin who had started his own fund.At Harvard, Mr. Ellenbogen majored in the history of technology. One big thing he learned, he has said, was that technology is developed well in advance of people’s ability and willingness to use it.“Tell me something,” Mr. Ellenbogen asked Mr. Kelman, according to an account the chief executive posted on Redfin’s website. “When people start touring homes via an iPhone, won’t a lot of them decide, even after this whole pandemic ends, that this is just a better way to see houses? And if this whole process of buying and selling homes mostly goes virtual, how will other brokerages compete with you?”Mr. Kelman, a little preoccupied by how Seattle’s normally bustling streets were eerily empty, said he didn’t know.“I do,” Mr. Ellenbogen said. “The world is changing in your favor.”This was not a general view then, and it certainly was not what Mr. Kelman was experiencing. The first confirmed coronavirus death in the United States was a nursing home resident in a Seattle suburb on Feb. 29. Within hours, home sellers decided that maybe they did not want strangers breathing in their living room and bedrooms. Buyers began to pull out as well.For Redfin, that was the beginning of a crisis. Within a few days, it shut down its 78 offices around the country. Its stock plunged, losing two-thirds of its value.“The magnitude of the decline was increasing every day,” Mr. Kelman said. He agreed to sell Mr. Ellenbogen more stock for $110 million, thinking Redfin might need cash to make it through a long drought. In early April, Mr. Kelman furloughed 41 percent of the company’s agents, who were salaried employees. More than 1,000 people were affected.By that point, real estate was already turning around. Instead of killing demand for housing, the pandemic fueled it.“The economy split in two on about April 7, 2020,” Mr. Kelman said. “One part of the economy suffered greatly, but another did just fine — the people who said, ‘If the world is going to end in the virus-filled streets of New York, I’m going to Connecticut or Vermont or Maine and I need a house there.’ What we thought was a headwind was a tailwind.”The pandemic as a whole, it became clear, was a tailwind for tech in very basic ways.When tens of millions of people were urged and sometimes ordered to stay put in their homes, naturally companies whose very existence involves facilitating virtual lives benefited. The rise of the teleconferencing company Zoom as both a verb and stock market winner was perhaps the easiest call of the year.“Call it half luck — being in the right place at the right time — and half strategic tactics by companies recognizing this was going to be a once in a lifetime opportunity,” said Dan Ives, a managing director at Wedbush Securities. “What for most industries were hurricane-like headwinds was a pot of gold for tech.”Even companies that might have seemed vulnerable to stay-at-home mandates did well. Airbnb is a company whose whole existence was about going to stay in strangers’ homes. The pandemic should have killed the buzz for its long-awaited public offering in December. But its stock price doubled on the first day of trading, giving the company a value of $100 billion.Tech companies like Redfin that reacted defensively in March risked being left out of the recovery in April. The 2020 housing market, pushed by pandemic demand and negligible interest rates, turned out to be the best since 2006.Those furloughed at Redfin were soon hired back. Mr. Ellenbogen’s deal proved extremely lucrative. But an estimated 10 million people are behind on the rent even as eviction moratoriums start to expire.Mr. Kelman, more introspective than most tech executives, feels a little queasy.“Tech used to be delivering these wonders to the world, and all of us in the industry felt the human uplift of general progress,” he said. “With the pandemic, fortunes have really diverged and at least some people in tech are really uncomfortable about that.”Pushing Back“We went from being pirates to being the Navy,” said Marc Andreessen. “People may love pirates when they’re young and small and scrappy, but nobody likes a Navy that acts like a pirate.”Steve Jennings/Getty ImagesThe biggest, and perhaps the only, threat to tech now is from government.Tech antitrust reformers say the government response to the pandemic, including the national eviction moratorium, repudiated decades of entrenched belief in a hands-off economic approach. Now, the activists say, they will have their moment.“When the government moved in a robust way to keep everybody afloat, free-market ideologies died,” said Stacy Mitchell, co-director of the Institute for Local Self-Reliance, a research and advocacy organization that fights corporate control. “People now appreciate that the government can either make choices that centralize power and wealth or it can structure markets and industries in way that deliver benefits more broadly.”There are signs of pushback against tech that would have been unimaginable a few years ago, beyond the House bills. Ohio sued Google, saying it should be regulated like a public utility. The Teamsters, one of the biggest labor unions, passed a resolution to supply “all resources necessary” to help organize workers at Amazon. Lina Khan, who made her reputation as a critic of Amazon, was appointed Federal Trade Commission chair. On Tuesday, the White House said it would nominate Jonathan Kanter, a tech critic, to be the Justice Department’s top antitrust official.But there are signs of movement in the other direction, too. The F.T.C. and a coalition of state attorneys general saw their antitrust lawsuits against Facebook dismissed by a Washington judge last month. The F.T.C. can refile an improved suit by the end of this month.Any measures restricting tech will ultimately need public sentiment behind them to succeed. Even some of tech’s biggest supporters see the potential for worry here.“We went from being pirates to being the Navy,” Marc Andreessen, a central figure in Silicon Valley for a quarter-century, told the Substack writer Noah Smith in a recent interview. “People may love pirates when they’re young and small and scrappy, but nobody likes a Navy that acts like a pirate. And today’s technology industry can come across a lot like a Navy that acts like a pirate.”Beyond the threat of misuse of tech lurks an even darker possibility: a misplaced confidence in the ability of one loosely regulated sector to run so much of the world.Weeks before the pandemic, the RAND Corporation published a study on systemic risk and how a problem with one company can imperil others in its network. Systemic risk was a big issue in the 2008 financial collapse, when the government propped up some companies because their downfall might imperil the whole system. They were too big to fail.The research group investigated whether tech companies had supplanted financial firms as a key node in the economy, and if the economy was growing too dependent on them. Amazon, whose AWS cloud division has millions of customers, was highlighted.In December, RAND’s point was made when SolarWinds, which makes software that allows other companies to manage their networks, was revealed to have been infiltrated by Russian hackers. Since SolarWinds had so many clients, including Fortune 500 companies and federal agencies, the breach became one of the worst on record.Tech’s dominance means the risks are more concentrated than ever. There were problems at the security firm Cloudflare in July 2020, at Amazon in November, at the cloud provider Fastly last month and at the content distribution network Akamai on Thursday, all of which took down other sites at least briefly.These outages caused little concern.That’s typical of systemic issues, said Jonathan Welburn, a lead author on the RAND study. “Before 2008, when house prices kept rising and rising, no one wanted to hear how they were being artificially propped up and why that could be a problem,” he said.Pushing Forward“When people are remote, I worry about what their career trajectory is going to be,” IBM’s chief executive, Arvind Krishna, recently told the BBC.Brian Ach/Getty ImagesThe pandemic gave tech companies the power and the cash to make aggressive bets on their individual destinies. Buying another company was one way to do this. Global deal values in tech soared 47.3 percent in 2020 from a year ago.Zillow, a digital real estate company in Seattle, spent $500 million in February to buy ShowingTime, a scheduling platform for home showings. A few weeks later, Zillow said it would hire 2,000 people, increasing its work force by 40 percent.But its biggest bet will take longer to play out. Before the pandemic, Zillow discouraged working from home, like most companies. Then last summer, it said 90 percent of its employees could work remotely forever if they chose.At the time, Zillow was in the vanguard of a movement. Now the idea of the non-virtual office is re-exerting its pull with managers.Amazon says its plan “is to return to an office-centric culture as our baseline.” Google asserted the same thing, although it backed off after workers rebelled. IBM says 80 percent of its employees will be in the office at least three days a week.“When people are remote, I worry about what their career trajectory is going to be,” IBM’s chief executive, Arvind Krishna, told the BBC.Zillow is something of an outlier. Even after a year of working from home, 59 percent of its employees told the company they planned to go into the office once a month or less.This may be the pandemic’s ultimate tailwind: not just the future coming much faster to your company, but actively pushing your company faster into the future. It is a risk that might be easier to undertake if your market value has suddenly tripled the way Zillow’s did.If Zillow is wrong about the future and employees are less bound to an office they visit only virtually, the company will stumble. If it is right, it will increase its workers’ loyalty and outdistance earthbound competitors.“The pandemic forced change on all of us,” said Jeremy Wacksman, Zillow’s chief operating officer. “We didn’t wish for it but now we’re learning from it.”More than a third of Zillow employees moved in the year that began in March 2020. Many moves were from one part of Seattle’s metro area to another, indicating a general reluctance not to get so far away from the office you could not drive there. But other employees dispersed to New Mexico, Mississippi and Alabama. Nine moved to Hawaii.“They liked their job but wanted to go somewhere else. That used to be a problem. Now it’s not,” said Viet Shelton, a Zillow spokesman who, as it happens, just moved to Manhattan from Seattle because he always wanted to live in New York.Now that employees no longer have to live where Zillow has an office, interest has swelled. More than 55,000 applied to work at Zillow in the first quarter, up 51 percent from the prepandemic level and about 10 applicants for every person employed there. Zillow has hired more recruiters to deal with the onslaught.Over at Redfin, the stock is up 400 percent from its pandemic bottom. Redfin paid $608 million in February to acquire a publisher of rental listings, its biggest deal ever. But while the company seems so rich, so successful, so lucky from the outside, it feels different within. Managing growth is almost as hard as managing a downturn.“Customers are clamoring for service and we can’t hire fast enough,” said Mr. Kelman. “Redfin never had a moment when it was absolutely and totally killing it, but I always imagined when we did that it would be more fun than this.” More

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    A New Crop in Pennsylvania: Warehouses

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    OREFIELD, Pa. — From his office in an old barn on a turkey farm, David Jaindl watches a towering flat-screen TV with video feeds from the hatchery to the processing room, where the birds are butchered. Mr. Jaindl is a third-generation farmer in Pennsylvania’s Lehigh Valley. His turkeys are sold at Whole Foods and served at the White House on Thanksgiving. More

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    ‘A Perfect Positive Storm’: Bonkers Dollars for Big Tech

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    The dictionary doesn’t have enough superlatives to describe what’s happening to the five biggest technology companies, raising uncomfortable questions for their C.E.O.s.In the Great Recession more than a decade ago, big tech companies hit a rough patch just like everyone else. Now they have become unquestioned winners of the pandemic economy.The combined yearly revenue of Amazon, Apple, Alphabet, Microsoft and Facebook is about $1.2 trillion, according to earnings reported this week, more than 25 percent higher than the figure just as the pandemic started to bite in 2020. In less than a week, those five giants make more in sales than McDonald’s does in a year.The U.S. economy is cranking back from 2020, when it contracted for the first time since the financial crisis. But for the tech giants, the pandemic hit was barely a blip. It’s a fantastic time to be a titan of U.S. technology — as long as you ignore the screaming politicians, the daily headlines about killing free speech or dodging taxes, the gripes from competitors and workers, and the too-many-to-count legal investigations and lawsuits.America’s technology superpowers aren’t making bonkers dollars in spite of the deadly coronavirus and its ripple effects through the global economy. They have grown even stronger because of the pandemic. It’s both logical and slightly nuts.The wildly successful last year also raises uncomfortable questions for tech company bosses, the public and elected officials already peeved about the industry: Is what’s good for Big Tech good for America? Or are the tech superstars winning while the rest of us are losing?Americans have more money in their pockets thanks to government stimulus checks and pandemic savings, and the tech giants are getting a significant share. Their combined revenue is equivalent to roughly 5 percent of the gross domestic product of the United States.Big Tech’s pandemic big bucks have an understandable root cause: We needed its services.People gravitated to Facebook’s apps to stay in touch and entertained, and businesses wanted to pay Facebook and Google, which Alphabet owns, to help them find customers who were stuck at home. People preferred to buy diapers and deck chairs from Amazon rather than risk their health shopping in stores. Companies loaded up on software from Microsoft as their businesses and work forces went virtual. Apple’s laptops and iPads become lifelines for office workers and schoolchildren.Before the pandemic, America’s technology superpowers were already influential in how we communicated, worked, stayed entertained and shopped. Now they are practically unavoidable. Investors have scooped up Big Tech shares in a bet that these companies are nearly invincible.“They were already on the way up and had been for the best part of a decade, and the pandemic was unique,” said Thomas Philippon, a professor of finance at New York University. “For them it was a perfect positive storm.”Times weren’t so good for these companies in the last economic rough patch. In the downturn from 2007 to 2009, Microsoft’s sales dropped slightly, and its stock price fell 60 percent from the fall of 2008 to March 2009, a low point for U.S. stocks. Google and Amazon each lost as much as two-thirds of their market value.One sign of how this time is different: Amazon’s revenue is growing much faster in 2021 than it did in 2009, when the company was one-fifteenth its current size. Sales in the first quarter rose 44 percent from a year earlier, and Amazon’s profits before taxes — which have never been exactly robust — more than doubled to $8.9 billion. Businesses are addicted to Amazon’s cloud computer services, where sales rose 32 percent, and shoppers can’t live without Amazon’s delivery. Investors love Amazon, too. The company’s stock market value has nearly doubled since the beginning of 2020 to $1.8 trillion.For the other tech giants, it’s as if their brief pandemic nosedive never happened. Advertising sales typically rise and fall with the economy. But as other types of ad spending shrank when the U.S. economy contracted last year, ad sales rose for Google and Facebook. The growth was even better for them in the first three months of this year.A year ago, analysts worried that Apple would be crippled as the pandemic gripped China, which is the hub of the company’s manufacturing operations and its most important consumer market. The fears didn’t last long. In the first three months of 2021, Apple’s revenue from selling iPhones increased at the fastest rate since 2012. Sales in mainland China, Taiwan and Hong Kong nearly doubled from a year earlier.Apple’s revenue from iPhone sales in the first three months of the year rose at the fastest pace since 2012.Agence France-Presse — Getty ImagesThe tech giants are not the only companies rallying in dark times. America’s big banks have also been on a tear. So have some younger technology companies, such as Snap and Zoom, the maker of the pandemic-favorite videoconferencing app. The crisis forced all sorts of businesses to go digital fast in ways that could help them thrive. Restaurants invested in online sales and delivery, and doctors went full bore into telemedicine.But the dictionary doesn’t have enough superlatives to describe what’s happening to the five biggest technology companies. It’s all a bit awkward, really. It’s rocket fuel for critics, including some regulators and lawmakers in Europe and the United States, who say the tech giants crowd out newcomers and leave everyone worse off.Big Tech companies say they face stiff competition that leads to better products and lower prices, but their bank statements might suggest otherwise. Facebook’s profit margins are higher now than they were before the pandemic.Some of their success is explained by the peculiarities of the pandemic economy. Some people and sectors are doing awesome, while other families are lining up at food banks and while companies like airlines are begging for cash. Unlike the stock market clobbering in the Great Recession, stock indexes in the United States have reached new highs.The tech superstars have also capitalized on this moment. Alphabet and Facebook have used the pandemic to cut back in places that matter less, such as promotional costs and travel and entertainment budgets. And the tech giants have generally increased spending in areas that extend their advantages.Alphabet is now spending more on big-ticket projects, like building computer complexes, than Exxon Mobil spends to dig oil and gas out of the ground. Amazon’s work force has expanded by more than 470,000 people since the end of 2019. That deepens the moat separating the tech superstars from everyone else.Big Tech is emerging from the pandemic lean, mean and ready for a U.S. economy expected to roar back to life in 2021. Meanwhile, there are still long lines at food banks. Some American workers who lost their jobs last year may never get them back. Housing advocates are worried that millions of people will be evicted from their homes. And being Big Tech is an invitation for everyone to hate you — but you do have towering piles of money. More

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    Amazon Workers Defeat Union Effort in Alabama

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    The company’s decisive victory deals a crushing blow to organized labor, which had hoped the time was ripe to start making inroads.Amazon workers at a giant warehouse in Alabama voted decisively against forming a union on Friday, squashing the most significant organizing drive in the internet giant’s history and dealing a crushing blow to labor and Democrats when conditions appeared ripe for them to make advances.Workers cast 1,798 votes against a union, giving Amazon enough to emphatically defeat the effort. Ballots in favor of a union trailed at 738, fewer than 30 percent of the votes tallied, according to federal officials.The lopsided outcome at the 6,000-person warehouse in Bessemer, Ala., came even as the pandemic’s effect on the economy and the election of a pro-labor president had made the country more aware of the plight of essential workers.Amazon, which has repeatedly quashed labor activism, had appeared vulnerable as it faced increasing scrutiny in Washington and around the world for its market power and influence. President Biden signaled support for the union effort, as did Senator Bernie Sanders, the Vermont independent. The pandemic, which drove millions of people to shop online, also raised questions about Amazon’s ability to keep those employees safe.But in an aggressive campaign, the company argued that its workers had access to rewarding jobs without needing to involve a union. The victory leaves Amazon free to handle employees on its own terms as it has gone on a hiring spree and expanded its work force to more than 1.3 million people.Margaret O’Mara, a professor at the University of Washington who researches the history of technology companies, said Amazon’s message that it offered good jobs with good wages had prevailed over the criticisms by the union and its supporters. The outcome, she said, “reads as a vindication.”She added that while it was just one warehouse, the election had garnered so much attention that it had become a “bellwether.” Amazon’s victory was likely to cause organized labor to think, “Maybe this isn’t worth trying in other places,” Ms. O’Mara said.The Retail, Wholesale and Department Store Union, which led the drive, blamed its defeat on what it said were Amazon’s anti-union tactics before and during the voting, which was conducted from early February through the end of last month. The union said it would challenge the result and ask federal labor officials to investigate Amazon for creating an “atmosphere of confusion, coercion and/or fear of reprisals.”“Our system is broken,” said Stuart Appelbaum, the union’s president. “Amazon took full advantage of that.”Amazon said in a statement, “The union will say that Amazon won this election because we intimidated employees, but that’s not true.” It added, “Amazon didn’t win — our employees made the choice to vote against joining a union.”About half of the 5,876 eligible voters at the warehouse cast ballots in the election. A majority of votes, or 1,521, was needed to win. About 500 ballots were contested, largely by Amazon, the union said. Those ballots were not counted. If a union had been voted through, it would have been the first for Amazon workers in the United States. More

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    Amazon’s Clashes With Labor: Days of Conflict and Control

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    Amazon was built on an underdog philosophy, but its workers are finding a voice. That presents a problem for the company that goes far beyond the union vote in Alabama.It has been Day 1 at Amazon ever since the company began more than a quarter-century ago. Day 1 is Amazon shorthand for staying hungry, making bold decisions and never forgetting about the customer. This start-up mentality — underdogs against the world — has been extremely good for Amazon’s shoppers and shareholders.Day 1 holds less appeal for some of Amazon’s employees, especially those doing the physical work in the warehouses. A growing number feel the company is pushing them past their limits and risking their health. They would like Amazon to usher in a more benign Day 2.The clash between the desire for Day 1 and Day 2 has been unfolding in Alabama, where Amazon warehouse workers in the community of Bessemer have voted on whether to form a union. Government labor regulators are getting ready to sort through the votes in the closely watched election. A result may come as soon as this week. If the union gains a foothold, it will be the first in the company’s history.Attention has been focused on Bessemer, but the struggle between Day 1 and Day 2 is increasingly playing out everywhere in Amazon’s world. At its heart, the conflict is about control. To maintain Day 1, the company needs to lower labor costs and increase productivity, which requires measuring and tweaking every moment of a worker’s existence.That kind of control is at the heart of the Amazon enterprise. The idea of surrendering it is the company’s greatest horror. Jeff Bezos, Amazon’s founder, wrote in his 2016 shareholder letter: “Day 2 is stasis. Followed by irrelevance. Followed by excruciating, painful decline. Followed by death. And that is why it is always Day 1.”For many years, Amazon has managed to maintain control and keep Day 1 going by dazzling with delivery and counted on the media, regulators and politicians to ignore everything unpleasant. The few stories about workers rarely got traction.But it is now the second-largest private employer in the country. There is widespread pro-worker sentiment in the United States and a pro-union president. In Bessemer, many of the pro-union workers are Black, which makes this a civil rights story as well.Amazon needs to measure and tweak every moment of a worker’s existence to maintain its edge, but it is facing more pushback against its control.Bob Miller for The New York TimesSo the costs associated with Day 1 are finally coming into view. And it is showing up not only in Alabama, but in the form of lawsuits, restive workers at other warehouses, Congressional oversight, scrutiny from labor regulators and, most noisily, on Twitter.In recent weeks, a heated discussion about whether Amazon’s workers must urinate in bottles because they have no time to go to the bathroom — a level of control that few modern corporations would dare exercise — has raged on Twitter.“Amazon is reorganizing the very nature of retail work — something that traditionally is physically undemanding and has a large amount of downtime — into something more akin to a factory, which never lets up,” said Spencer Cox, a former Amazon worker who is writing his Ph.D. thesis at the University of Minnesota about how the company is transforming labor. “For Amazon, this isn’t about money. This is about control of workers’ bodies and every possible moment of their time.”Amazon did not have a comment for this story.Signs that Amazon is facing more pushback against its control have started to pile up. In February, Lovenia Scott, a former warehouse worker for the company in Vacaville, Calif., accused Amazon in a lawsuit of having such an “immense volume of work to be completed” that she and her colleagues did not get any breaks. Ms. Scott is seeking class-action status. Amazon did not respond to a request for comment on the suit.Last month, the California Labor Commissioner said 718 delivery drivers who worked for Green Messengers, a Southern California contractor for Amazon, were owed $5 million in wages that never made it to their wallets. The drivers were paid for 10-hour days, the labor commissioner said, but the volume of packages was so great that they often had to work 11 or more hours and through breaks.Amazon said it no longer worked with Green Messengers and would appeal the decision. Green Messengers could not be reached for comment.An Amazon warehouse in the Canadian province of Ontario showed rapid spread of Covid-19 in March. “Our investigation determined a closure was required to break the chain of transmission,” said Dr. Lawrence Loh, the regional medical officer. “We provided our recommendation to Amazon.” The company, he said, “did not answer.” The health officials ordered the workers to self-isolate, effectively shutting the facility for two weeks. Amazon did not respond to a request for comment on the situation.And five U.S. senators wrote a letter to the company last month demanding more information about why it was equipping its delivery vans with surveillance cameras that constantly monitor the driver. The technology, the senators wrote, “raises important privacy and worker oversight questions Amazon must answer.”Amazon has presented a different opinion of what Day 1 means for workers. The first thing it mentions in its official statement on Bessemer is the starting pay of $15.30 per hour, double the federal minimum wage.Mr. Cox, who worked in an Amazon warehouse in Washington state, said the higher pay has paradoxically fueled the discontent. The pay “is better than working at a gas station, so people naturally want to keep these jobs,” he said. “That’s why they want them to be fair. I saw a lot of depression and anxiety when I worked for Amazon.”(Mr. Cox said he was fired by Amazon in 2018 for organizing. Amazon told him he had violated safety protocol).The confrontation between Day 1 and Day 2 has been sharpest over bladders.The topic erupted last month when Representative Mark Pocan, Democrat of Wisconsin, tweeted at the company, “Paying workers $15/hr doesn’t make you a ‘progressive workplace’ when you union-bust & make workers urinate in water bottles.”Amazon’s social media account fired back: “You don’t really believe the peeing in bottles thing, do you? If that were true, nobody would work for us.”This isn’t the way corporations usually talk to members of Congress, even on Twitter. On Friday, after days of being pummeled on the issue, Amazon apologized to Representative Pocan, saying: “The tweet was incorrect. It did not contemplate our large driver population and instead wrongly focused only on our fulfillment centers.” Amazon blamed Covid and “traffic,” not its punishing schedules.Representative Pocan responded on Saturday with a sigh. “This is not about me, this is about your workers — who you don’t treat with enough respect or dignity,” he wrote.The bathroom question is one on which the company has long been vulnerable. Enforcement files from regulators in Amazon’s home state of Washington indicate that questions about whether the company had an appropriate number of bathrooms in its Seattle headquarters have arisen over the past dozen years.The company has “insufficient lavatory facilities for male employees” according to a 2012 complaint received by the state’s Department of Labor and Industries. “Employees routinely traverse multiple buildings in search of available facilities.”A 2014 complaint filed by an Amazon employee to the same department said employees got 12 minutes a day for “bathroom, getting water, personal calls, etc.” outside of normally scheduled breaks. Those who needed further toilet time had to provide a doctor’s note “explaining why the need to void more than usual.”The complaints went beyond Amazon’s white-collar offices. A warehouse worker told Labor and Industries in 2009 that a manager and a human resources representative had told her that “there would be disciplinary action against me if I continue to use the bathroom on company time” — she meant unscheduled breaks. The employee added that the H.R. representative told her that “it was not fair to the company that I was getting paid when I’m not working because I’m in the bathroom.”Amazon’s headquarters in Seattle. Some employees have filed bathroom-related complaints, including saying some of the offices have too few restrooms.Miles Fortune for The New York TimesAmazon did not respond to questions about the enforcement reports. A spokesman for the Department of Labor and Industries declined to comment, except to note that outside of Amazon, “We really don’t get a lot of bathroom-related complaints.”Other technology companies have prided themselves on overriding mere bodily needs. Marissa Mayer, an early Google employee, attributed the search company’s success to working 130 hours a week — entirely possible, she said in a 2016 interview with Bloomberg Businessweek, “if you’re strategic about when you sleep, when you shower, and how often you go to the bathroom.”When Google was a start-up, the notion was that you gave up everything — family, sleep, diversion — so you might become successful and rich. But former workers at Amazon warehouses said that under the Day 1 philosophy, they suffered merely to stay employed.“I believe many employees have indirectly lost their job for going to the bathroom. You’re like, can I hold it to break time?” said John Burgett, who blogged for several years about working in an Amazon warehouse in Indiana.His conclusion on his last entry, in 2016: Amazon was “testing the limits of human beings as a technical tool.” More

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    What is Going on with China, Cotton and All of These Clothing Brands?

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    A user’s guide to the latest cross-border social media fashion crisis.Last week, calls for the cancellation of H&M and other Western brands went out across Chinese social media as human rights campaigns collided with cotton sourcing and political gamesmanship. Here’s what you need to know about what’s going on and how it may affect everything from your T-shirts to your trench coats.What’s all this I’m hearing about fashion brands and China? Did someone make another dumb racist ad?No, it’s much more complicated than an offensive and obvious cultural faux pas. The issue centers on the Xinjiang region of China and allegations of forced labor in the cotton industry — allegations denied by the Chinese government. Last summer, many Western brands issued statements expressing concerns about human rights in their supply chain. Some even cut ties with the region all together.Now, months later, the chickens are coming home to roost: Chinese netizens are reacting with fury, charging the allegations are an offense to the state. Leading Chinese e-commerce platforms have kicked major international labels off their sites, and a slew of celebrities have denounced their former foreign employers.Why is this such a big deal?The issue has growing political and economic implications. On the one hand, as the pandemic continues to roil global retail, consumers have become more attuned to who makes their clothes and how they are treated, putting pressure on brands to put their values where their products are. One the other, China has become an evermore important sales hub to the fashion industry, given its scale and the fact that there is less disruption there than in other key markets, like Europe. Then, too, international politicians are getting in on the act, imposing bans and sanctions. Fashion has become a diplomatic football.This is a perfect case study of what happens when market imperatives come up against global morality.Tell me more about Xinjiang and why it is so important.Xinjiang is a region in northwest China that happens to produce about a fifth of the world’s cotton. It is home to many ethnic groups, especially the Uyghurs, a Muslim minority. Though it is officially the largest of China’s five autonomous regions, which in theory means it has more legislative self-control, the central government has been increasingly involved in the area, saying it must exert its authority because of local conflicts with the Han Chinese (the ethnic majority) who have been moving into the region. This has resulted in draconian restrictions, surveillance, criminal prosecutions and forced-labor camps.OK, and what about the Uyghurs?A predominantly Muslim Turkic group, the Uyghur population within Xinjiang numbers just over 12 million, according to official figures released by Chinese authorities. As many as one million Uyghurs and other Muslim minorities have been retrained to become model workers, obedient to the Chinese Communist Party via coercive labor programs.Burberry created signature check “skins” for characters in the Honor of Kings video game, which its owner, the Chinese technology company Tencent, removed over the company’s stand on cotton produced in the Xinjiang region.via Honor of KingsSo this has been going on for awhile?At least since 2016. But after The New York Times, The Wall Street Journal, Axios and others published reports that connected Uyghurs in forced detention to the supply chains of many of the world’s best-known fashion retailers, including Adidas, Lacoste, H&M, Ralph Lauren and the PVH Corporation, which owns Calvin Klein and Tommy Hilfiger, many of those brands reassessed their relationships with Xinjiang-based cotton suppliers.In January, the Trump administration banned all imports of cotton from the region, as well as products made from the material and declared what was happening “genocide.” At the time, the Workers Rights Consortium estimated that material from Xinjiang was involved in more than 1.5 billion garments imported annually by American brands and retailers.That’s a lot! How do I know if I am wearing a garment made from Xinjiang cotton?You don’t. The supply chain is so convoluted and subcontracting so common that often it’s hard for brands themselves to know exactly where and how every component of their garments is made.So if this has been an issue for over a year, why is everyone in China freaking out now?It isn’t immediately clear. One theory is that it is because of the ramp-up in political brinkmanship between China and the West. On March 22, Britain, Canada, the European Union and the United States announced sanctions on Chinese officials in an escalating row over the treatment of Uyghurs in Xinjiang.Not long after, screenshots from a statement posted in September 2020 by H&M citing “deep concerns” about reports of forced labor in Xinjiang, and confirming that the retailer had stopped buying cotton from growers in the region, began circulating on Chinese social media. The fallout was fast and furious. There were calls for a boycott, and H&M products were soon missing from China’s most popular e-commerce platforms, Alibaba Group’s Tmall and JD.com. The furor was stoked by comments on the microblogging site Sina Weibo from groups like the Communist Youth League, an influential Communist Party organization.Within hours, other big Western brands like Nike and Burberry began trending for the same reason.And it’s not just consumers who are up in arms: Influencers and celebrities have also been severing ties with the brands. Even video games are bouncing virtual “looks” created by Burberry from their platforms.Backtrack: What do influencers have to do with all this?Influencers in China wield even more power over consumer behavior than they do in the West, meaning they play a crucial role in legitimizing brands and driving sales. When Tao Liang, otherwise known as Mr. Bags, did a collaboration with Givenchy, for example, the bags sold out in 12 minutes; a necklace-bracelet set he made with Qeelin reportedly sold out in one second (there were 100 made). That’s why H&M worked with Victoria Song, Nike with Wang Yibo and Burberry with Zhou Dongyu.But Chinese influencers and celebrities are also sensitive to pleasing the central government and publicly affirming their national values, often performatively choosing their country over contracts.In 2019, for example, Yang Mi, the Chinese actress and a Versace ambassador, publicly repudiated the brand when it made the mistake of creating a T-shirt that listed Hong Kong and Macau as independent countries, seeming to dismiss the “One China” policy and the central government’s sovereignty. Not long afterward, Coach was targeted after making a similar mistake, creating a tee that named Hong Kong and Taiwan separately; Liu Wen, the Chinese supermodel, immediately distanced herself from the brand.The actress Zhou Dongyu, the actor Wang Yibo and the singer and actress Victoria Song, all Chinese influencers who had deals with Western brands that they then  repudiated when their products were said to disrespect the Chinese people and government.VCG/VCG, via Getty ImagesAnd what’s with the video games?Tencent removed two Burberry-designed “skins” — outfits worn by video game characters that the brand had introduced with great fanfare — from its popular title Honor of Kings as a response to news that the brand had stopped buying cotton produced in the Xinjiang region. The looks had been available for less than a week.So this is hitting both fast fashion and the high end. How much of the fashion world is involved?Potentially, most of it. So far Adidas, Nike, Converse and Burberry have all been swept up in the crisis. Even before the ban, additional companies like Patagonia, PVH, Marks & Spencer and the Gap had announced that they did not source material from Xinjiang and had officially taken a stance against human rights abuses.This week, however, several brands, including VF Corp., Inditex (which owns Zara) and PVH all quietly removed their policies against forced labor from their websites.That seems squirrelly. Is this likely to escalate?Brands seem to be concerned that the answer is yes, since, apparently fearful of offending the Chinese government, some companies have proactively announced that they will continue buying cotton from Xinjiang. Hugo Boss, the German company whose suiting is a de facto uniform for the financial world, posted a statement on Weibo saying, “We will continue to purchase and support Xinjiang cotton” (even though last fall the company had announced it was no longer sourcing from the region). Muji, the Japanese brand, is also proudly touting its use of Xinjiang cotton on its Chinese websites, as is Uniqlo.Wait … I get playing possum, but why would a company publicly pledge its allegiance to Xinjiang cotton?It’s about the Benjamins, buddy. According to a report from Bain & Company released last December, China is expected to be the world’s largest luxury market by 2025. Last year it was the only part of the world to report year on year growth, with the luxury market reaching 44 billion euros ($52.2 billion).Is anyone going to come out of this well?One set of winners could be the Chinese fashion industry, which has long played second fiddle to Western brands, to the frustration of many businesses there. Shares in Chinese apparel groups and textile companies with ties to Xinjiang rallied this week as the backlash gained pace. And more than 20 Chinese brands publicly made statements touting their support for Chinese cotton. More

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    Google Aims to Be the Anti-Amazon of E-Commerce. It Has a Long Way to Go.

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    Google presents itself to independent sellers as cheaper and less restrictive. But it is not clear whether it can change people’s habits of going straight to Amazon.OAKLAND, Calif. — Google tried to copy Amazon’s playbook to become the shopping hub of the internet, with little success. Now it is trying something different: the anti-Amazon strategy.Google is trying to present itself as a cheaper and less restrictive option for independent sellers. And it is focused on driving traffic to sellers’ sites, not selling its own version of products, as Amazon does.In the last year, Google eliminated fees for merchants and allowed sellers to list their wares in its search results for free. It is also trying to make it easier for small, independent shops to upload their inventory of products to appear in search results and buy ads on Google by teaming up with Shopify, which powers online stores for 1.7 million merchants who sell directly to consumers.But like Google’s many attempts during its two-decade quest to compete with Amazon, this one shows little sign of working. Google has nothing as alluring as the $295 billion that passed through Amazon’s third-party marketplace in 2020. The amount of goods people buy on Google is “very small” by comparison — probably around $1 billion, said Juozas Kaziukenas, the founder of Marketplace Pulse, a research company.Amazon is a fixture in the lives of many Americans. It has usurped Google as the starting point for shoppers and has become equally essential for marketers. Amazon’s global advertising business grew 30 percent to $17.6 billion in 2020, trailing only Google and Facebook in the United States.But as the pandemic has forced many stores to go online, it has created a new opening for Google to woo sellers who feel uneasy about building their businesses on Amazon.Christina Stang, 33, opened Fritzy’s Roller Skate Shop near Pacific Beach in San Diego last March. Shelter-in-place orders forced her to set up an online storefront on Shopify.She got lucky. She was sitting on a huge supply of skates when demand surged as skating videos became popular on TikTok during the pandemic.Christina Stang, the owner of Fritzy’s, avoided selling on Amazon because of its fees, but now Google has suspended her account because of a discrepancy in shipping costs.John Francis Peters for The New York TimesShe linked her Shopify account to Google’s retail software and started buying so-called smart shopping ads. Working within an allotted budget, Google’s algorithms pick where to place ads and what products to feature. In 2020, she spent $1,800 on the ads, which were viewed 3.6 million times and led to $247,000 in sales, she said.She considered selling her products on Amazon’s marketplace, but she worried what Amazon’s fees would mean for her already-thin profit margins. She also liked that Google redirected people to her carefully curated website rather than keeping them inside its own store, as Amazon does.“I could sell on Amazon and not make any real money but have a bigger online presence,” Ms. Stang said. “It didn’t seem like a great idea.”Recently, however, she has experienced one of the drawbacks of being stuck in the middle of the partnership between Google and Shopify. Her shop has been unable to list any products since January because Google suspended her account. It said her shipping costs appeared more expensive on Google than on her Shopify-powered website, even though they were no different.Shopify told her that it was a Google issue. Google’s customer service representatives recommended that she hire a web designer. She continues to manage without Google, but it has tainted her largely positive experience.“This has completely cut me off at the knees,” she said. “I’m a small business, and I don’t have hundreds or thousands of dollars to resolve this.”Sellers often complain about Amazon’s fees, which can account for a quarter of every sale, not including the cost of advertising, and the pressure to spend more to succeed. Merchants on Amazon do not have a direct relationship with their customers, limiting their ability to communicate with them and to generate future business. And because everything is contained within the Amazon world, it is harder to create a unique look and feel that express a brand’s identity the way companies can on their own websites.But since 2002, when it started a price comparison site called Froogle, a confusing play on the word “frugal” that required a rebranding five years later, Google has struggled to chart a cohesive vision for its shopping experience.It tried to challenge Amazon directly by piloting its own same-day delivery service, but it shuttered the project as costs ballooned. It tried to forge partnerships with traditional retail giants, only to see the alliances wilt from a lack of sales. It built its own marketplace to make it easier for shoppers to buy the things they find on Google, but was not able to break consumers from their Amazon habit.Last year, Google brought in Bill Ready, a former chief operating officer at PayPal, to fill a new senior position and spearhead an overhaul of its shopping strategy.Around the time of his hiring, Sundar Pichai, Google’s chief executive, warned senior executives that the new approach could mean a short-term crimp in advertising revenue, according to two people familiar with the conversations, who requested anonymity because they were not allowed to discuss them publicly. He asked teams to support the e-commerce push because it was a company priority.When the pandemic spurred huge demand for online shopping, Google eliminated fees, allowing retailers to list products for free and walking back a 2012 decision to allow only advertisers to display goods on its shopping site.Three months after hiring Mr. Ready, Google said the free listings would show up on its main search results. Then Google said customers could buy products directly from merchants on Google with no commissions. It also said Google would open its platform to third parties like Shopify and PayPal so that sellers could continue to use their existing tools to manage inventory and orders and processing payments.Google brought in Bill Ready to spearhead an overhaul of its shopping strategy.Kendrick Brinson for The New York TimesThe partnership with Shopify was especially meaningful because hundreds of thousands of small businesses have flocked to the software platform during the pandemic. About 9 percent of U.S. online shopping sales took place on storefronts powered by Shopify as of October, according to research firm eMarketer. That was up from 6 percent the prior year and second only to Amazon’s share of 37 percent.Harley Finkelstein, Shopify’s president, said Google and Shopify were developing new ways for merchants to sell through Google services, such as experiments to allow customers to buy items directly on YouTube and to display what products stores are carrying in Google Maps.Mr. Ready walked a fine line when it came to Amazon, which is a big buyer of ads on Google, but he made it clear he believed Amazon’s dominance in e-commerce posed a threat to other merchants.“Nobody wants to live in a world where there is only one place to buy something, and retailers don’t want to be dependent on gatekeepers,” he said in an interview.Google said it had increased the number of sellers appearing in its results by 80 percent in 2020, with the most significant growth coming from small and midsize businesses. And existing retailers are listing more products.Overstock.com, a seller of discount furniture and home bedding, said it had paid to list products on Google in the past. But now that listings are free, Overstock is adding low-margin products, too.“When all shopping starts and stops at Amazon, that’s bad for the industry,” said Jonathan E. Johnson, Overstock’s chief executive. “It’s nice to have another 800-pound tech gorilla in this space.”What remains unclear is whether increasing the number of merchants and listings on Google will ultimately change online shopping habits.BACtrack, a maker of breathalyzers, has more than doubled its advertising spending on Amazon in the last two years because that is where the customers are, it said, while it has spent 6 percent less advertising its products on Google.“It seems like more and more people are skipping Google and going straight to Amazon,” said Keith Nothacker, the chief executive of BACtrack. More