Welcome to this weekly roundup of stories from Insider’s Business co-Editor in Chief Matt Turner. Subscribe here to get this newsletter in your inbox every Sunday.
What we’re going over today:
- Some Amazon managers say they hire people they intend to fire just to meet their turnover goal.
- James Charles’ former employee speaks out about her lawsuit against the makeup mogul.
- Shopify’s CEO emailed managers to remind them they are a team, not a family.
- Top mortgage bankers are quitting Wells Fargo in droves.
- Investing legend Jeremy Grantham says the current market is eerily reminiscent of the dot-com bubble.
What’s trending this morning:
- What it’s really like to return to the office: Sydney, where employees went back in October, offers a glimpse at the future of in-person work.
- Americans say the pandemic is changing their personalities: Managers need to take notice or risk losing people.
- Down with venture capital: Why millennial entrepreneurs are embracing the sweaty-startup movement
- The secret life of Ian Osborne: The shadowy 38-year-old cofounder of Chamath Palihapitiya’s SPAC has built the ultimate black book of billionaires.
- ‘I’m a stay-at-home dad. I was guaranteed I could get my job back, but now my employer is backtracking. What do I do?’: Read the second edition of What’s Working?, a new work-advice column.
Amazon has a goal to get rid of a certain percentage of employees every year – and three managers told Insider they felt so much pressure to meet the goal that they hired people just to fire them:
“We might hire people that we know we’re going to fire, just to protect the rest of the team,” one manager said.
The practice is informally called “hire to fire,” in which managers hire people, internally or externally, they intend to fire within a year, just to help meet their annual turnover target, called unregretted attrition (URA). A manager’s URA target is the percentage of employees the company wouldn’t regret seeing leave, one way or the other.
The existence of the practice in at least some parts of the company shows how Amazon’s system of requiring managers to hit a target attrition goal every year can foster controversial norms and practices.
Get the full rundown:
- Some Amazon managers say they ‘hire to fire’ people just to meet the internal turnover goal every year
- Google’s No. 2 man Prabhakar Raghavan- and the boss of its most important product – is a quiet executive in charge of 21,500 people. Insiders reveal what it’s like to work with him.
- The head of recruiting at CloudKitchens, Travis Kalanick’s startup, has resigned after an internal misconduct investigation
James Charles’ former producer and creative director, Kelly Rocklein, is speaking out about her lawsuit against him, which alleges wrongful termination, disability discrimination, failure to provide reasonable accommodation, and failure to pay minimum wage for overtime hours worked:
In addition to working her more than 80 hours a week without overtime pay, according to Rocklein and her complaint, Rocklein said Charles seemed “incredibly unprofessional.”
“Imagine having to go over and essentially pick James up out of bed, tell him to brush his teeth, tell him, ‘OK, what do you want to eat? OK, someone is coming to do your laundry. OK, I’m going to get your laundry, I guess. OK, time to start filming – you don’t want to film – well, we both know you have to. So please let’s think about it,'” Rocklein said.
She also said Charles walked around the house naked in front of her, called Rocklein names like “bitch,” and once texted her, “Kelly i might need your help shaving my butt” in preparation for a revealing Coachella outfit. Rocklein said Charles made her feel “extremely uncomfortable.”
Take a look at everything that led to the lawsuit:
- James Charles’ ex-employee speaks out about lawsuit, claiming he didn’t pay overtime and asked her to shave his butt
- I’m a 24-year-old who ditched my NYC apartment for a travel subscription that costs $2,500 a month to live and work in luxury hotels across the US. Here’s what it was like.
- The top lawyers who work with YouTube, TikTok, and Instagram creators
In the wake of intense internal debate about issues of race, Shopify CEO Tobi Lütke sent an email to managers outlining the company’s core beliefs. In it, he made clear what the company is not – it is not a government, he said, and it “cannot solve every societal problem”:
In the email, he said that “endless Slack trolling, victimhood thinking, us-vs-them divisiveness, and zero sum thinking” amounted to a “threat” that breaks teams. He encouraged managers to stay focused on Shopify’s mission of empowering online commerce and entrepreneurship.
A Shopify spokesperson told Insider that the company was not trying to emulate Basecamp in its handling of political issues and that it welcomed discussion of current events.
“As Shopify is growing quickly with new team members joining every day, our executive team will often send company-wide messages to remind the organization of our vision for equitable entrepreneurship and to reignite our spirit of positive collaboration,” the spokesperson said. “This reinforces our need to work together in creating a future that unites, not divides.”
Read the full email here:
- Read the essay Shopify’s CEO sent to managers to remind them they are a sports team, not a family. It shows the growing tension between leaders and employees in the corporate world.
- Shopify employees found a noose emoji uploaded to Slack. Its CEO then silenced internal discussions.
- Diversity leaders call Basecamp’s political-talk ban ‘more than a mistake’
More than 20 top mortgage lenders at Wells Fargo have left in the past year, while four of the bank’s elite President’s Club members have left since December. Five current and former mortgage bankers described a culture of heavy oversight and clunky technology that limited their ability to do business:
Tom Goyda, a Wells Fargo spokesperson, said the exits are due to the competitiveness of the market for mortgage talent.
“We’ve been in a very competitive mortgage market, and top-producing loan offers are in high demand across the industry,” Goyda said. “Wells Fargo has hired top producers from other lenders, and some of our home mortgage consultants have moved to other firms.”
But the mortgage bankers who spoke with Insider pointed to excessive red tape, clunky legacy technology, and the Federal Reserve-imposed asset cap as factors that stymied loan growth and led them to quit.
More on the mortgage bankers’ departures:
- Micromanagement, surprise employee investigations, and email surveillance: Why top mortgage bankers are quitting Wells Fargo in the middle of a red-hot housing market
- Blackstone just told US investment professionals to report back to the office on June 7, and the private-equity giant has spent $20 million on safety precautions like paying for cabs to work
- The crypto talent war is heating up as big money managers warm to digital assets
Jeremy Grantham made prescient calls about the 2000 and 2008 bubble bursts, and said the current market was eerily reminiscent of the dot-com bubble. He describes four indicators that have lined up for what could be “the biggest loss of perceived value from assets that we have ever seen”:
When Jeremy Grantham declared in January that “the long, long bull market since 2009 has finally matured into a fully fledged epic bubble,” he said he knew there would be “a substantial increase in crazy behavior” before it all came crashing down.
The cofounder of Boston’s Grantham, Mayo, van Otterloo & Co. is famous for having made prescient calls about the bursting of the 1989 Japanese asset-price bubble, the 2000 tech bubble, and the 2008 real-estate bubble.
“The thing about a bubble is if you can find more money and more crazy investors, it can keep going,” he said.
Here’s Grantham’s full market outlook:
- Legendary investor Jeremy Grantham called the dot-com bubble and the 2008 financial crisis. He told us how 4 indicators have lined up for what could be ‘the biggest loss of perceived value from assets that we have ever seen.’
- Bank of America says Wall Street stock pickers remain vulnerable to an inflation shock – and recommends 2 trades for protection as prices rise
- Morgan Stanley’s Mike Wilson was right about the last two market sell-offs. He lays out 3 ways stock investors can position for a challenging reopening environment that could bring a 20% drop
Live event invite: Join us Tuesday, May 18 at 12 p.m. ET for “Master Your Money,” where personal finance professionals demystify debt – and offer tips and tricks to help set you up to build wealth. Register here.
Lastly, here are some headlines you might have missed last week.
- Mark Patricof gets some of the world’s biggest athletes into hot private equity deals. He tells us how he built an A-list client roster that includes Venus Williams and J.J. Watt.
- Employees at top biotech companies can get paid up to $701,000. Here’s where workers made the most in 2020.
- FBI director Chris Wray barely survived the Trump era. Now he’s working with Biden’s attorney general taking on domestic terrorism and probing Trump allies.
- The strip mall is the hottest real-estate investment right now, as hordes of new suburbanites need groceries, booze, and cheap stuff for their homes.
- Apple’s recent privacy changes are already wreaking havoc on Facebook advertisers, and ad buyers are scrambling to manage the disruptions
- Inside the booming home-care industry, where wages are low, turnover high, and Wall Street investors are trickling in
- Why software’s subscription model is ‘dying’ and usage-based pricing is the ‘next wave’ for cloud services
- The 10 beach towns real-estate investors should target for the best returns right now