Workers stand in line to cast ballots for a union election at Amazon’s JFK8 distribution center, in the Staten Island borough of New York City, U.S. March 25, 2022.
Brendan Mcdermid | Reuters
On Friday afternoon, a stream of Amazon workers exited a sprawling warehouse on New York’s Staten Island after wrapping up the daytime shift. Many of them packed into city buses to head home. On their way, they walked past a large, white tent stretching across a chunk of the parking lot.
That tent will be a crucial site for the next five days.
Workers at the facility, known as JFK8, just started voting on whether to join the Amazon Labor Union, a group made up of current and former company employees. The results will carry significance well beyond New York City’s smallest borough, and affect workers at all of Amazon’s warehouses, where two-day Prime shipping is made possible.
The buzz was palpable on Friday as employees at JFK8 milled around a nearby bus stop chatting about the election. Some sported yellow “vote yes” lanyards, while others wore blue “vote no” t-shirts.
The election runs through March 30, and the National Labor Relations Board will begin counting votes the following day. ALU has called on Amazon to raise wages, along with other demands. Amazon recently raised its average starting pay to $18 an hour.
It’s the second union vote at an Amazon warehouse in a year, a potentially concerning sign for a company that’s long shunned organized labor. Employees at Amazon’s facility in Bessemer, Alabama, were the first to try and unionize last spring. That effort failed, but workers there are at it again after the NLRB ordered a do-over because of improper interference in the prior union drive.
In Alabama and New York, workers are voting on whether to join the Retail, Wholesale and Department Store Union. Organizing efforts are underway at other facilities, including at another Staten Island warehouse, where an election is slated to begin later next month.
The more national labor unions have targeted Amazon, the more aggressive Amazon has become in discouraging employees from joining.
At JFK8, Amazon papered the walls with banners that proclaim “Vote No.” The company even set up a website, telling employees, “The ALU is making big promises but offering very little detail on how they will achieve them.” Amazon has also held weekly meetings with anti-union presentations that employees are required to sit through.
Kevin Pardee, who’s worked at JFK8 for two and a half years, said it’s been hard to ignore Amazon’s “overwhelming union-busting” while walking throughout the facility.
“You can’t go anywhere without some form of anti-union propaganda in your face,” Pardee said.
Kelly Nantel, an Amazon spokesperson, referred CNBC to prior statements the company has issued on the matter.
Amazon has papered the Staten Island facility’s walls with banners that proclaim “Vote No.”
“Every day we empower people to find ways to improve their jobs, and when they do that we want to make those changes — quickly,” Amazon has said. “That type of continuous improvement is harder to do quickly and nimbly with unions in the middle.”
ALU organizers have also been vocal. Last year, they set up a tent near a bus stop outside the facility to hand out flyers and collect union authorization cards. More recently, they’ve delivered meals to employees in JFK8’s break room, while drawing attention to their cause on Twitter and TikTok.
Activism among Amazon employees has picked up since the beginning of the coronavirus pandemic. Deemed as essential workers, delivery and warehouse employees labored on the front lines while many white-collar employees worked from the comforts of their homes.
As the pandemic dragged on, Amazon workers staged protests and spoke out about workplace safety. The tightening labor market in the U.S. further galvanized support for unionization, and workers have seized the moment to demand higher pay and better benefits from their employers.
JFK8, which sits just off the bustling Staten Island Expressway in an office park with two other Amazon warehouses, serves as a major distribution point for the e-commerce giant’s operations in the region. More than 2.4 million packages are delivered every day in New York City.
During lockdowns, the roughly 6,000 workers at JFK8 helped keep packages flowing to the city’s residents, who were staying home and wanting more stuff sent to their doorstep.
In March 2020, shortly after the pandemic hit the U.S., workers at the facility staged a walkout, voicing their frustration with what they viewed as Amazon’s failure to keep them safe.
Soon after that, Amazon attracted national attention for firing Chris Smalls, then a management assistant who led the protest. A leaked memo obtained by Vice revealed David Zapolsky, Amazon’s general counsel, had referred to Smalls as “not smart or articulate” in a meeting with the company’s top executives, an incident that further angered critics of Amazon’s labor practices.
Amazon workers at Amazon’s Staten Island warehouse strike in demand that the facility be shut down and cleaned after one staffer tested positive for the coronavirus on March 30, 2020 in New York.
Angela Weiss | AFP | Getty Images
In October, the ALU filed a union petition with the NLRB to unionize. After refiling its petition earlier this year, the NLRB gave the ALU the green light to move forward with a vote. Smalls is president of the ALU.
The election is somewhat unusual, as the ALU is a grassroots, worker-led organization, not a national labor union. But organizers say that makes it more relatable to employees.
Angelika Maldonado, chairwoman of ALU’s worker committee, returned to Amazon in September after she quit her job at JFK8 in 2019. She soon met some ALU organizers, who were huddled around a bonfire near the bus stop outside the warehouse.
Maldonado, a single mom with a young son, said she’s learned a lot about the struggles that her colleagues are facing. One of the organizers is homeless and some workers are sleeping in their cars, she said.
The ALU is gathering outside support. The United Food and Commercial Workers Union and the New York City chapter of Unite Here, a hospitality union, have both assisted with the campaign.
“We have experience from unions that are guiding us,” said Derrick Palmer, an ALU organizer and worker at JFK8. “We didn’t get this far by accident.”
Goldman Sachs CEO David Solomon gets 29% pay cut to $25 million
David Solomon, Chairman & CEO of Goldman Sachs, speaking on Squawk Box at the WEF in Davos, Switzerland on Jan. 23rd, 2023.
Adam Galica | CNBC
The package includes a $2 million base salary and variable compensation of $23 million, New York-based Goldman said in the filing. Most of Solomon’s bonus— 70%, or $16.1 million, is in the form of restricted shares tied to performance metrics, while the rest is paid in cash, the bank said.
Solomon’s pay, while large by most any measure, is about 29% lower than the $35 million he was granted for his 2021 performance. Meanwhile, Goldman’s full year earnings fell by 48% to $11.3 billion, thanks to sharp declines in investment banking and asset management revenue, the company said last week.
While the bank was primarily hit by industrywide slowdowns in capital markets activity as the Federal Reserve raised interest rates, Solomon also faced his own set of issues last year. Goldman was forced to scale back its ambitions in consumer finance and lay off nearly 4,000 workers in two rounds of terminations in recent months.
Fiji fires police commissioner and end security deal with China
Police operate a security check point in the Fijian capital of Suva in December following general elections. The Pacific island nation has played an important regional role amid competition between China on the one side and Australia, New Zealand and the United States on the other.
Saeed Khan | Afp | Getty Images
Fiji’s president on Friday suspended the commissioner of police following a general election saw the first change in government in the Pacific island nation in 16 years, after the military earlier warned against “sweeping changes.”
President Ratu Wiliame Katonivere said Commissioner of Police Sitiveni Qiliho had been suspended on the advice of the Constitutional Offices Commission, “pending investigation and referral to and appointment of, a tribunal.”
The Supervisor of Elections Mohammed Saneem was also suspended by the commission, the statement said.
Qiliho declined to comment to local media because he said he will face a tribunal over his conduct. He was seen as being close to former prime minister Frank Bainimarama, who led Fiji for 16 years before a coalition of parties narrowly won December’s election and installed Sitiveni Rabuka as leader of the strategically important Pacific nation.
The day before a coalition agreement was struck, Qiliho and Bainimarama called on the military to maintain law and order because they said the hung election result had sparked ethnic tensions, a claim disputed by the coalition parties.
The Pacific island nation, which has a history of military coups, has been pivotal to the region’s response to competition between China and the United States, and struck a deal with Australia in October for greater defence cooperation.
On Thursday, Fiji Times reported that Rabuka said his government would end a police training and exchange agreement with China.
“Our system of democracy and justice systems are different so we will go back to those that have similar systems with us,” the prime minister was quoted as saying, referring to Australia and New Zealand.
The prime minister’s office did not immediately respond to a request for comment.
Republic of Fiji Military Forces Commander Major General Jone Kalouniwai earlier this month warned Rabuka’s government against making “sweeping changes,” and has insisted it abide by a 2013 constitution which gives the military a key role.
Inventory glut and underused factories
Intel CEO Pat Gelsinger, with U.S. President Joe Biden (not pictured), announces the tech firm’s plan to build a $20 billion plant in Ohio, from the South Court Auditorium on the White House campus in Washington, January 21, 2022.
Jonathan Ernst | Reuters
Investors hated it, sending the stock over 9% lower in extended trading, despite the fact that Intel did not cut its dividend.
The earnings report, which was the eighth under CEO Pat Gelsinger’s leadership, shows a legendary technology company struggling with many factors outside of its control, including a deeply slumping PC market. It also highlights some of Intel’s current issues with weak demand for its current products and inefficient internal performance, and underscores how precarious the company’s financial health has become.
“Clearly, the financials aren’t what we would hoped,” Gelsinger told analysts.
In short: Intel had a difficult 2022, and 2023 is shaping up to be tough as well.
Here are some of the most concerning bits from Intel’s earnings report and analyst call:
Intel didn’t give full-year guidance for 2023, citing economic uncertainty.
But the data points for the current quarter suggest tough times. Intel guided for about $11 billion in sales in the March quarter, which would be a 40% year-over-year decline. Gross margin will be 34.1%, a huge decrease from the 55.2% in the same quarter in 2021, Gelsinger’s first at the helm.
But the biggest issue for investors is that Intel guided to a 15 cent non-GAAP loss per share, a big decline for a company that a year ago was reporting $1.13 in profit per share. It would be the first loss per share since last summer, which was the first loss for the company in decades.
Management gave several reasons for the tough upcoming quarter, but one theme that came through was that its customers simply have too many chips and need to work through inventory, so they won’t be buying many new chips.
Both the PC and server markets have slowed after a two-year boom spurred by remote work and school during the pandemic. Now, PC sales have slowed and the computer makers have too many chips. Gelsinger is predicting PC sales during the year to be around 270 million to 295 million — a far cry from the “million units-a-day” he predicted in 2021.
Now, Intel’s customers have to “digest” the chips they already have, or “correct” their inventories, and the company doesn’t know when this dynamic will shift back.
“While we know this dynamic will reverse, predicting when is difficult,” Gelsinger told analysts.
Underpinning all of this is that Intel’s gross margin continues to decline, hurting the company’s profitability. One issue is “factory load,” or how efficiently factories run around the clock. Intel said that its gross margin would be hit by 400 basis points, or 4 percentage points, because of factories running under load because of soft demand.
Ultimately, Intel forecasts a 34.1% gross margin in the current quarter — a far cry from the 51% to 53% goal the company set at last year’s investor day. The company says it’s working on it, and the margin could get back to Intel’s goal “in the medium-term” if demand recovers.
“We have a number of initiatives under way to improve gross margins and we’re well under way. When you look at the $3 billion reduction [in costs] that we talked about for 2023, 1 billion of that is in cost of sales and we’re well on our way to getting that billion dollars,” Gelsinger said.
Long-term investors have always closely watched how the company balances the near-term need to placate shareholders with the massive capital spending needed to stay competitive in the semiconductor manufacturing business.
If Intel is cutting costs and still needing to invest in chip factories to power its turnaround, analysts say it may want to reconsider its dividend. Intel spent $6 billion on dividends in 2022, but did not cut its dividend on Thursday.
Meanwhile, the company said it wants to cut $3 billion in costs for 2023 and analysts believe it wants to spend around $20 billion in capital expenditures to build out its factories.
Gelsinger was asked about this dynamic on Thursday.
“I’d just say the board, management, we take a very disciplined approach to the capital allocation strategy and we’re going to remain committed to being very prudent around how we allocate capital for the owners and we are committed to maintaining a competitive dividend,” Gelsinger replied.
There was at least one bright spot for Intel on Thursday.
Mobileye, its self-driving subsidiary that went public during the December quarter, reported earlier in the day, showing adjusted earnings per share of 27 cents and revenue growth of 59%, to $656 million. It also forecast strong 2023 revenue of between $2.19 billion and $2.28 billion. Shares rose nearly 6% during regular trading hours Thursday.
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