business news in context, analysis with attitude

The New York Times reflects on some of the details that emerged last week in Amazon founder/CEO Jeff Bezos’ annual letter to shareholders. Some excerpts:

• “It underscored just how unfathomably big Amazon is. Amazon has 560,000 employees, and the company added 130,000 jobs in 2017 alone. For context, that means that Amazon added more than a Facebook’s worth of employees during every quarter last year.”

• “Mr. Bezos spent a lot of time talking about his standards — specifically, high ones. ‘I believe high standards are domain specific,’ he wrote, ‘and that you have to learn high standards separately in every arena of interest.’ He continued: ‘You can consider yourself a person of high standards in general and still have debilitating blind spots’.”

And, the Times opined:

“Amazon’s economic dominance — made clear by the staggering facts and figures in Mr. Bezos’ letter — makes the billions of dollars in tax breaks and incentives that have been offered to Amazon by job-hungry cities look even more ridiculous. If there’s one company that doesn’t need your city’s largess, it’s Amazon.”

Meanwhile, the Washington Post has a story about a subject largely ignored in Bezos’ shareholder letter last week - where Amazon’s second headquarters, dubbed HQ2, might be located.

The Post writes that “although the company’s search materials don’t make it explicit, Amazon has quietly made rights for and acceptance of gay and transgender people part of its criteria in choosing a second headquarters, according to two people familiar with the matter who spoke on the condition of anonymity to talk freely.

“As Amazon executives recently toured finalist locations to help select what they’ve dubbed HQ2, they asked public officials about what sort of ‘compatible cultural and community environment’ — the wording from the company’s search parameters — each city offers, adding to speculation about whether Amazon will choose a liberal stronghold.”

In Dallas, that meant local officials brought the pastor of a predominantly gay megachurch in on the pitch, stressing how inclusive and welcoming his church is. But in North Carolina and Atlanta, concerns were expressed about pieces of legislation - like a bill that would restrict same-sex adoption - that may reflect a reluctance to invest so much money in those locations.

However, the Post writes, “by raising a social issue during its search, Amazon also risks alienating conservative political leaders, including President Trump, who has recently criticized the company’s taxes and its contract with the U.S. Postal Service, which delivers many of its packages.”

The Post notes that “Amazon’s second headquarters project is the biggest economic development prize — by a long shot — that many industry veterans say they have ever seen. The company says that over the years in Seattle, it has invested $3.7 billion and paid more than $25 billion in salaries. For HQ2, the company estimates it will hire as many as 50,000 people, make $5 billion in capital investments and fill 8 million square feet of office space, which would be larger than the Pentagon.”
KC's View:
First of all, I completely agree with the idea that a company with the resources of Amazon ought not be getting the kind of financial incentives that some communities appear to be offering. I’m completely consistent about this - I’ve said the same thing about Walmart in this space over the years.

If communities really want to support small businesses, maybe they ought to be offering them some sort of tax relief and/or incentives.

As for the HQ2 speculation, I’ve been saying here all along that I think Amazon will choose either a blue state or a blue community inside a red state for its second headquarters. It needs to be in a place that is seen as welcoming to its highly diverse workforce, with fewer perception issues … and I’ve thought all along that this means Boston, or maybe Austin … with a possibility that somewhere near Washington, DC, could also be victorious.