Welcome to the Weekly Scan. Here’s what we’re following for the week of November 30, 2020:
Amazon’s expedited employment. In one of corporate America’s biggest hiring sprees since the end of World War II, Amazon reportedly hired 427,300 people between January and October of 2020, as demand for online goods soared during the pandemic. The tech company has added an average of 1,400 people per day. Amazon’s total number of employees has increased 50% year-over-year, to 1.2 million people. The new hires include mostly warehouse workers, as well as software developers and hardware experts, across the U.S., Italy, and India.
- The takeaway: This latest employment rush demonstrates an increasing reliance on Amazon. Amazon is expected to surpass the biggest private employer Walmart, with 2.2 million employees, within two years. Amazon’s hiring rush beats Walmart’s one-year addition of 230,000 workers approximately twenty years ago. Meanwhile, governments are increasingly cracking down on the dominance of big tech companies, such as Amazon. Regulators in the European Union and the U.S. have accused Amazon of antitrust violations.
Tell it to Yellen. President-elect Joseph Biden has chosen former Federal Reserve Chair Janet Yellen as Secretary of the Treasury for his incoming administration. Yellen was the first female leader of the Federal Reserve and, if confirmed by the Senate next year, would be the first woman to head of the Department of the Treasury since its founding in 1789.
- The takeaway: As head of the Treasury, Yellen will be instrumental in setting fiscal policy for the U.S. during the most challenging economic contraction for the nation since the 2008 financial crisis, including pandemic-related business closures and record job losses. In the years following the 2008 crisis while leading the Federal Reserve, she gradually increased interest rates and is credited with helping to guide the economy back to prosperity. Yellen, who was also the sole woman to earn a PhD in economics from Yale in 1971, is viewed by some experts as someone with substantial political experience who can satisfy both progressives and centrists in the new administration.
McKinsey’s opioid problem. Consulting firm McKinsey is the subject of a new investigative report, which shows that it urged Oxycontin manufacturer Purdue Pharma, for which it worked as a consultant between 2017 and 2019, to provide monetary financial rebates to distributors of the drug whose customers had addiction and overdose problems. The rebates were reportedly meant to turbo-charge sales of Purdue’s popular painkiller, as sales of the drug began to flag and as the opioid addiction problem was escalating out of control in the U.S. in 2017.
- The takeaway. In October, Purdue reached an $8 billion settlement with the Department of Justice, and pleaded guilty to three criminal charges for contributing to the creation of the opioid crisis in the U.S. The company agreed to pay a $3.5 billion fine, surrendered $2 billion in past profits, and paid $2.8 billion for civil liability. Purdue also shut down and turned into a company for public benefit. McKinsey, which has a controversial history reportedly working for dictatorships, has reportedly said it is working with investigators looking into its role with Purdue, and has since stopped consulting on opioid-related business worldwide.
Tony Hsieh’s death. Tech entrepreneur Tony Hsieh, the founder and former chief executive officer of online shoe company Zappos, died at the age of 46 on November 27, 2020, reportedly from injuries caused by a house fire. Hsieh first founded a marketing tech firm called LinkExchange, later selling the company to Microsoft in 1998 for $265 million, when he was just 24. He then went on to found a venture capital firm and become an early investor in a company called ShoeSite.com, later rebranded as Zappos. Amazon acquired Zappos for $1.2 billion in 2009. Hsieh then used that money to focus on revitalizing the city of Las Vegas, Nevada.
- The takeaway: Hsieh was one of the first business executives to realize that in order to succeed, online business needed high-touch customer service, and pioneered free delivery and free returns. Hsieh also helped to revitalize the city of Las Vegas, moving Zappos’s headquarters there in 2004, and later spending $350 million to revitalize the city’s downtown. He also purchased real estate in the city and invested in companies that promised to bring their offices there. The circumstances around Hsieh’s passing are still under investigation.
Find out what we covered in last week’s Scan.