Technology | Mon Aug 24, 2015 2:04pm EDT Related: TECH, CHINA Apple's Cook reassures investors on China, stock boomerangs BY DEVIKA KRISHNA KUMAR
Customers wait for the opening of an Apple store in Shenyang, Liaoning province, February 28, 2015. REUTERS/STRINGER
Apple Inc's Chief Executive Tim Cook took an unusual step of reassuring shareholders on Monday in comments to CNBC about the iPhone maker's business in China ahead of a dramatic 13 percent drop and rebound in its stock that put it in positive territory.
Chinese consumers are critical to fueling demand for iPhones, and a slump in the country's stock market and Beijing's recent devaluation of the yuan have shaken Apple investors already worried about slowing growth in the world's No. 2 economy.
With Chinese stocks plunging close to 9 percent earlier on Monday, Cook took the rare step of commenting on the health of Apple's business midway through a financial quarter. Before the opening bell on Wall Street, he wrote in an emailed response to questions that iPhone activations in China had accelerated over the past few weeks.
He also said the App Store in China had its best performance of the year over the past two weeks.
"Obviously I can't predict the future, but our performance so far this quarter is reassuring. Additionally, I continue to believe China represents an unprecedented opportunity over the long term," Cook wrote.
In the early minutes of trade, Apple shares slumped as much as 13 percent to a year-low of $92 amid a selloff in the broader U.S. market. But in a little over two hours they reversed those losses to trade up 2.25 percent at $108.12, adding around $85 billion to Apple's market capitalization from its earlier low.
That helped the Nasdaq composite and the S&P 500 index pull away from deep losses that had put them into correction territory.
“The fact that (Cook) publicly gave some positive signs around what Apple is seeing out of China during this market meltdown is a huge sigh of relief for investors who have started to have nightmares about what China can become over the coming years for Apple,” said FBR analyst Daniel Ives.
Apple's success over the past decade has made it a top holding for many portfolios and it accounts for 3.5 percent of the S&P 500, indirectly affecting millions of investors saving for their retirements through passively invested index funds.
Many on Wall Street remained cautious about risks Apple faces in China's potentially stumbling economy. After Monday's rebound, Apple's stock was still down about 19 percent from its record high close set in February.
"I am concerned about a slowdown in Apple's demand from China and I think they haven't even seen the extent of it yet," said Cowen and Company analyst Timothy Arcuri.
Such fears were exacerbated last week after a Gartner report said smartphone sales in the country fell for the first time ever in the previous quarter.
China's smartphone market is widely believed to be close to saturation with fewer first-time buyers, although Apple has continued to gain market share there.
(Reporting by Devika Krishna Kumar in Bengaluru, additional reporting by Julia Love in San Francisco, writing by Noel Randewich; Editing by Meredith Mazzilli)
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The cruel and back-stabbing environment described by The New York Times in a report this weekend on the workplace culture at Amazon.com has struck a nerve with Jeff Bezos. In a memo to employees this weekend, obtained by GeekWire, Bezos says he doesn’t recognize the company described in the article.
In the memo, Bezos encourages Amazon employees to read the report, and requests that anyone seeing the type of abusive culture described in the piece should report it immediately to human resources or directly to him.
“The article doesn’t describe the Amazon I know or the caring Amazonians I work with every day,” Bezos writes. “But if you know of any stories like those reported, I want you to escalate to HR. You can also email me directly at jeff@amazon.com. Even if it’s rare or isolated, our tolerance for any such lack of empathy needs to be zero.”
He adds later, “I strongly believe that anyone working in a company that really is like the one described in the NYT would be crazy to stay. I know I would leave such a company.”
And he concludes, “But hopefully, you don’t recognize the company described. Hopefully, you’re having fun working with a bunch of brilliant teammates, helping invent the future, and laughing along the way.”
It is rare for Bezos to respond so directly to a news report. Faced with criticism throughout its history — whether dealing with book publishers or diversity issues — Amazon’s approach has been to stay quiet. Amazon authorized “a handful of senior managers” to talk with the Times reporters for the article, but declined to make Bezos or other top leaders available for interviews, according to the story.
But the reporting clearly has Bezos’ attention now.
The New York Times piece — based interviews with more than 100 current and former Amazon employees — cited several cases of alleged employee mistreatment, depicting managers who were unsympathetic to employees even when they were faced with illnesses or family issues. Reporters Jodi Kantor and David Streitfeld describe a hard-charging environment at Amazon where employees often are pushed to the point where they nearly “combust.”
Here’s the full memo from Jeff Bezos, as obtained by GeekWire:
Dear Amazonians,
If you haven’t already, I encourage you to give this (very long) New York Times article a careful read:
Here’s why I’m writing you. The NYT article prominently features anecdotes describing shockingly callous management practices, including people being treated without empathy while enduring family tragedies and serious health problems. The article doesn’t describe the Amazon I know or the caring Amazonians I work with every day. But if you know of any stories like those reported, I want you to escalate to HR. You can also email me directly at jeff@amazon.com. Even if it’s rare or isolated, our tolerance for any such lack of empathy needs to be zero.
The article goes further than reporting isolated anecdotes. It claims that our intentional approach is to create a soulless, dystopian workplace where no fun is had and no laughter heard. Again, I don’t recognize this Amazon and I very much hope you don’t, either. More broadly, I don’t think any company adopting the approach portrayed could survive, much less thrive, in today’s highly competitive tech hiring market. The people we hire here are the best of the best. You are recruited every day by other world-class companies, and you can work anywhere you want.
I strongly believe that anyone working in a company that really is like the one described in the NYT would be crazy to stay. I know I would leave such a company.
But hopefully, you don’t recognize the company described. Hopefully, you’re having fun working with a bunch of brilliant teammates, helping invent the future, and laughing along the way.
Thank you,
Jeff
CREDITPHOTOGRAPH BY PATRICK FALLON/BLOOMBERG VIA GETTY
SEATTLE (The Borowitz Report)—Saying that he was “horrified” by a New York Times article recounting callous behavior on the part of Amazon executives, company founder Jeff Bezos warned today that any employees found lacking in empathy would be instantly purged.
In an e-mail to all Amazon employees issued late Sunday evening, Bezos said that the company would begin grading its workers on empathy, and that the ten per cent found to be least empathic would be “immediately culled from the herd.”
To achieve this goal, Amazon said that it would introduce a new internal reporting system called EmpathyTrack, which will enable employees to secretly report on their colleagues’ lack of humanity.
The system will allow Amazon employees to grade their co-workers on a scale from a hundred (nicest) to zero (pure evil), resulting in empathy-based data that will be transmitted directly to Bezos.
Then, through a new program called Next Day Purging, any employee found lacking in empathy will be removed from the company within twenty-four hours of Bezos’s termination order.
“We can’t be the greatest retailer in the world unless we are also the kindest,” Bezos wrote in his e-mail. “So my message to all Amazonians is loud and clear: be kind or taste my wrath. Love, Jeff.”
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