With Labor Day approaching, Amazon has told its sister publication, the Washington Post, that it is launching some technical teams that will only clock in for 30 hours a week (and only make 75% of full-time pay, but with full benefits.) The idea is to “create a work environment that is tailored to a reduced schedule and still fosters success and career growth.”
The experiment addresses several issues in the current zeitgeist:
–Concern among millennials about work/life balance;
–Concerns about the low percentage of women in technology jobs;
–Concern that artificial intelligence and other technology advances will reduce the availability of work in the future;
–Concerns that Amazon is a modern-day sweat shop, raised by a New York Times series last year.
To be sure, part-time pay for part-time work is nothing new. And predictions that workers will need to move to a shorter workweek in the future have been around for half a century, even as the average American workweek has gotten longer. Still, this sounds like a worthy experiment.
Meanwhile, markets are still dissecting Janet Yellen’s speech in Jackson Hole on Friday. But very few commentators have focused on her penultimate paragraph, which pointed out that we are putting far too much emphasis on the Fed to address economic problems:
“Finally, and most ambitiously, as a society we should explore ways to raise productivity growth. Stronger productivity growth would tend to raise the average level of interest rates and therefore would provide the Federal Reserve with greater scope to ease monetary policy in the event of a recession. But more importantly, stronger productivity growth would enhance Americans’ living standards. Though outside the narrow field of monetary policy, many possibilities in this arena are worth considering, including improving our educational system and investing more in worker training; promoting capital investment and research spending, both private and public; and looking for ways to reduce regulatory burdens while protecting important economic, financial, and social goals.”
Wouldn’t it be nice if our presidential candidates were talking about the same?
More news below.
• IPO market set to rebound
A short-lived revival is expected for the U.S. market for initial public offerings after the Labor Day holiday, with one of the largest expected IPOs expected to be Valvoline, an engine and automotive-maintenance business that is being spun off from Ashland and could raise $750 million. Another closely watched deal is Nutanix, a Silicon Valley software company that would be on of the few billion-dollar startups to debut this year. Any rebound would be welcome: as of late August, 2016 was on track to be the worst year for IPOs since the financial crisis.
The Wall Street Journal (subscription required)
• Prada shares jump on rosier 2017 view
Shares of Prada rose as much as 15% after the luxury-goods maker said that it would return to growth in sales and earnings next year, helped by cost-cutting and online expansion in Asia. Prada is aiming to double its e-commerce sales in each of the next three years by increasing the number of categories it offers online, particularly shoes, and expanding its social media activities. Some analysts have said the Italian company has been hurt harder than rivals because it was slow to invest in e-commerce. Investors for now are focusing on the future, less concerned with Prada’s first-half of the year earnings, which dropped 25%, while revenue for the six months ended July tumbled 15%.
• Asian stocks fall after Yellen’s speech
Most Asian share markets tumbled on Monday while the U.S. dollar added to gains made after Federal Reserve Chair Janet Yellen indicated a U.S. interest rate increase remains on the cards for this year. The case for a U.S. rate hike has strengthened in recent months, with a lot of new jobs being created, and economic growth looks likely to continue at a moderate pace, Yellen said in a speech at the Fed’s annual monetary policy conference in Jackson Hole, Wyoming, on Friday. While Yellen did not give guidance on what the central bank needs to see before raising rates, she said the Fed already thinks it is close to meeting its goals of maximum employment and stable prices.
• Opera Sync Users May Have Been Compromised
The Opera browser has a handy feature for synchronizing browsing data across different devices. Unfortunately, some of the passwords and login information used to enable the feature may have been stolen from Opera’s servers. The Norwegian firm told its users that someone had gained access to the Opera sync system, and “some of our sync users’ passwords and account information, such as login names, may have been compromised.” Opera claims the announcement is just a way to be cautious. However, the episode does serve as a reminder of how risky it can be to hold access to a multitude of web services in one cloud-based basket—no matter how convenient the feature may be.
Around the Water Cooler
• Pokémon Go is stalling out
Recent data showed that the sharp popularity of the Pokémon Go mobile game plateaued in mid-July—only two weeks after its debut—and has declined steadily since then. Daily active users and user engagement are both down by roughly 30% from their peak. Why? While initial interest was driven by the property’s nostalgia among twentysomethings, there was also fascination about the game’s usage of augmented reality. But the game also has multiple flaws, mostly design errors that make the game, well….not very fun. Despite the shortcomings, there is some hope that augmented reality does have a future, as Pokémon Go indicates there is great interest in playing a game that integrates real-world movement and social interaction.
• Startups aren’t dead. They are evolving.
The New York Times takes a peak at the world of high-valued startups, making an example of Evernote, maker of a note-taking app. After being valued at $1 billion, Evernote was hit hard last year due to overexpansion, resulting in cuts to staff, eliminating perks and simplifying its product line. The company eventually stabilized and it isn’t alone. Many pressured startups have hung on. “The start-up world did heed the warnings,” said Max Levchin, a founder of PayPal. And entrepreneurs who once talked about how fast their start-ups were growing are now touting a new message: fiscal responsibility.
The New York Times (subscription required)
• Frozen concentrated OJ market has disappeared
Traders have been dropping out of the market for frozen orange-juice concentrate in recent years because of waning demand for juice and a rampant disease that has producers abandoning groves. Now, entering hurricane season, those who remain must confront the possibility that a storm could wreak havoc on what is left of Florida’s orange crop, already on track for the smallest harvest in 52 years. Americans drank less orange juice in 2015 than in any year since Nielsen began collecting data in 2002, as smoothies and energy drinks take market share. That shift has hurt the market, as the number of future contracts held by traders has dropped by more than two-thirds from a 1997 high of 48,921, to 15,410 contracts last week.
The Wall Street Journal (subscription required)