This is an audio transcript of the FT News Briefing podcast episode: Apple under scrutiny for mishandling misconduct claims
Marc Filippino
Good morning from the Financial Times. Today is Monday, August 8, and this is your FT News Briefing.
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The global sell-off in stocks is having a knock-on effect on private markets. And mainstream economy companies like Uber are making more money than ever. Additionally, the FT reports that when more than a dozen female Apple employees reported misconduct to HR, their claims fell on deaf ears.
Patrick McGee
Apple’s immediate concern seems to be, will this hurt Apple?
Marc Filippino
The FT’s Patrick McGee will tell us what happened. My name is Marc Filippino and here’s the news you need to start your day.
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Over the past decade, low interest rates have encouraged pension funds and other large global investors to pour money into private equity such as buyout companies, venture capital and real estate funds. They were looking for higher returns. But in the first half of this year, the research shows that these investors sold $33 billion of their private equity holdings. This is an increase of 19,000 million in the same period last year. Here’s the FT’s Kaye Wiggins.
Kaye Wiggins
So I spoke to the head of private equity at a pension fund. Its pension fund has sold some of its private equity holdings at a discount. And he seemed pretty down about it. He said, we’ve never had to do this before, we hope we never have to. And, crucially, he also said they would reduce the amount of money they would commit to new private equity funds, both this year and next.
Marc Filippino
Kaye, what does this mean for pension funds and sovereign wealth funds and other funds that invest in private markets?
Kaye Wiggins
So, in the immediate short term, the effect is that they sell out at a discount. So now they expect to bring in less money for their own, either for their pensioners, or for the governments whose money they invest. They expect to bring in less money than they would have if they had kept those bets. And selling at a discount that you’re saying, we’d rather have some cash available now and we can do other things with that money rather than potentially make more money, or at least what the private equity firm itself says would be more. money in the future.
Marc Filippino
Now there’s been a $33 billion sale in the first half of this year, as we mentioned. What does it mean for private equity firms? It can’t be good, can it?
Kaye Wiggins
So the biggest way that this is a problem for private equity firms is actually what it says about their ability to raise funds in the future. Because if you think about it, if the pension funds and other investors are saying, wait, we want to take out the money that we’ve committed to for 10 years, that tells you that it’s very unlikely that they’re going to continue to allocate it. such huge sums of money to private equity firms in the future. If they haven’t even done that, you know, if they’re trying to get money out, they’re probably going to put less money into the next generation of private equity firms as well. And so that means that private equity firms, venture capital firms, are going to have a much harder time raising the kinds of mega-funds that over the last decade or so have been very easy to raise and that have driven them to turn -become a kind of huge force in global trading and to earn a lot of money in management fees. And all of this seems much more difficult now.
Marc Filippino
Kaye Wiggins is the FT’s private equity correspondent.
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Remember how great food delivery was in the worst days of the pandemic, when we’re all stuck at home and afraid to go out to eat? Well, pandemic restrictions have rolled back, and it turns out that food delivery is still huge. That’s one reason companies like DoorDash and Uber are making a lot of money right now. Here’s Dave Lee from the FT.
Dave Lee
In general, the story is of these companies that as we open up parts of the business that had suffered during the pandemic are coming back. And then parts of those companies that stood out during the pandemic are staying.
Marc Filippino
So Uber, DoorDash, and Lyft just reported very strong earnings in the most recent quarter. Uber had its first quarter of positive cash flow, which means more money coming in than going out. But not only is demand for these companies strong, but their prices are also rising.
Dave Lee
We are seeing the shift from that era when they were happy to lose travel to get service growth and worry about profits later. Well, we’re later now, that’s the latest. And I mean, if you even kind of compare pre-pandemic pricing to where we are now, you can see that the average price per mile on Uber has gone from $2.32 to $2.83. The average price per mile on Lyft has gone from $2.14 to $2.67. But unfortunately, the era of the gig economy that makes things cheaper for millennials like you and me seems to be over.
Marc Filippino
And there’s another reason why these companies’ profits are stronger. Dave says they’ve become more efficient and cut back on a lot of things.
Dave Lee
Uber used to have a self driving division, they got rid of it, fix it. I mean, at one point, Uber even tried looking at a flying car to scream. So now investors are saying, how about we don’t spend so much money? We are seeing hiring slowdowns. We are seeing hiring freezes in some cases. So Lyft, the companies, you know, they’re budgeting like anybody would. They just make sure their numbers add up by saving where they can.
Marc Filippino
This is our correspondent in San Francisco, Dave Lee.
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For much of the past year, the FT’s Patrick McGee has been talking to more than a dozen current and former Apple employees. They worked, or worked in different divisions and different states, and all say they were harassed, mistreated, or even sexually assaulted. When they went to Apple’s HR department, they said they hit a wall.
Patrick McGee
Apple treated the claims like, what’s the risk to our reputation here?
Marc Filippino
Patrick joins me now to talk more about this story. Hello, Patrick.
Patrick McGee
Hi Mark
Marc Filippino
So one of the women you talked to had a horrible story, right? He said that one night he went out for a platonic drink with a colleague. She ends up at home, falls asleep and wakes up to find him taking pictures of him shirtless. He had removed her shirt and bra. Finally, report it to Apple’s human resources department. what happens next
Patrick McGee
Yes. So he went to HR and he wasn’t asking, you know, to be punished or anything like that. It was actually years after the fact and it was after the #MeToo movement. And I literally just wanted to give HR a heads up. But the conversation really turns stiff and defensive, where Apple’s immediate concern seems to be, is this going to hurt Apple? And so they say: “. . . as an Apple employee, you have not violated any policies in the context of your employment at Apple. And since he hasn’t violated any policy, we won’t stop him from pursuing job opportunities that align with his goals and interests.” And it’s true, she’s just dumbfounded by this answer. Like, there just seems to be this tin ear when it comes to empathy.
Marc Filippino
Patrick, you talked to 14 other women, 15 total. What was your big takeaway from their stories?
Patrick McGee
Yes. So the common thread when these women went to HR was that they lost their jobs, you know, months later, apparently for something different. They did not feel at all that they had the right, even though it is a legal right to talk about harassment and discrimination at work, to go public. You get this feeling over and over again that, regardless of geography, regardless of department, if a woman had a particular complaint of misconduct against a colleague or against a manager, Apple’s HR department was more interested in burying him, in protecting the manager. , rather than actually listening to the employee.
Marc Filippino
How big is this problem, Patrick? I mean, you talk to 15 women and Apple has over 150,000 employees worldwide. Is this a widespread problem?
Patrick McGee
Yes. I mean, I don’t think Apple has a widespread problem here. I think they have a different problem. I’m not saying Apple’s entire culture needs to be overhauled or anything, am I? Like the top leadership of Apple and Tim Cook, I mean, they win multiple awards and I’m sure they deserve it. But again, this is a massive organization and when you go six levels deep in the organization, you know, where the managers are not household names.
Marc Filippino
What happens culturally? Is there a bigger cultural problem at Apple?
Patrick McGee
So you’re absolutely digging into the biggest thing that I had to deal with in my reporting, which was that what became really meaningful was talking to a former Apple HR professional who talked about the sides dark ones, as he called them. , to Apple’s secret culture, right? Apple has a famously secretive culture. He doesn’t want you to know what the next iPhone will look like. But the broad claim by many people is that they have extended this veil of secrecy to areas such as harassment and discrimination in the workplace. So women who had a problem with their manager, for example, had a natural tendency to think there was something wrong, right, rather than a problem with Apple’s managers and training processes. And perhaps it should be noted that Apple, in responding to these allegations, has pledged to change its training and processes in the wake of the article. And, you know, if that’s a genuine statement, right, then one should be encouraged by that.
Marc Filippino
Patrick McGee is the FT’s San Francisco correspondent. Thank you very much for your report, Patrick.
Patrick McGee
Hello, Mark.
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Marc Filippino
You can read more about all these stories at FT.com. This has been your daily FT News briefing. Be sure to check back tomorrow for the latest business news.
This transcript has been automatically generated. If by chance there is an error, please send the details for correction to: typo@ft.com. We will do our best to make the amendment as soon as possible.
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