Apple under scrutiny for mishandling misconduct complaints

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This is an audio transcription of the FT press briefing podcast episode: Apple under scrutiny for mishandling misconduct complaints

Marc Filipino
Hello from the Financial Times. Today is Monday, August 8, and it’s your FT News Briefing.

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The global equity sell-off is having a ripple effect on private markets. And top gig 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 complaints fell on deaf ears.

Patrick McGee
Apple’s immediate concern seems to be, will this hurt Apple?

Marc Filipino
Patrick McGee of the FT will tell us what happened. I’m 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 pump money into private capital such as buyout companies, venture capital and mutual funds. real estate. They were looking for higher returns. But in the first half of this year, research shows these investors sold $33 billion worth of their private equity stakes. That’s up from 19 billion during the same period last year. This is Kaye Wiggins from the FT.

Kaye Wiggins
So I spoke to the head of private equity at a pension fund. His pension fund sold some of his private equity stakes at a discount. And he looked pretty crestfallen about it. He said, we never had to do this before, we hoped we never had to. Crucially, he also said they were going to reduce the amount of money they would commit to new private equity funds, this year and next year.

Marc Filipino
Kaye, what does this mean for pension funds, sovereign wealth funds and other funds that have invested in private markets?

Kaye Wiggins
So the immediate effect is that they are selling at a discount. So they now expect to bring in less money for themselves, whether for their retirees, whether for the governments whose money they invest. They expect to make less money than they would have had they kept those stakes. And by selling at a discount, you say, we’d rather just have cash available now and we can do other things with that cash than potentially make more money, or at least what the private equity firm it -even said would be more money in the future.

Marc Filipino
Now, there was a $33 billion sale in the first half of this year, as we mentioned. What does this mean for private equity firms? It can’t be good, right?

Kaye Wiggins
So the main way this is problematic for private equity firms is actually what it says about their ability to raise money in the future. Because if you think about it, if pension funds and other investors are saying, hang in there, we want to pull out the money that we had committed for 10 years, then that tells you that it’s very unlikely that they continue to allocate these huge sums of money to private equity firms in the future. If they don’t even have, you know, if they’re trying to get money out, then they’re likely to invest less money in the next generation of private equity firms as well. And so that means that private equity firms, venture capitalists, will have a much harder time raising the kinds of mega funds that have been very easy to raise over the last decade and have propelled them to become a kind of huge force in global transactions and earn a ton of money in management fees. And it all seems much more difficult now.

Marc Filipino
Kaye Wiggins is the FT’s private capital correspondent.

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Remember how huge food delivery was in the worst days of the pandemic, when we were all stuck at home and afraid to go out to eat? Well, pandemic restrictions have rolled back and it turns out food delivery is still huge. It’s one of the reasons companies like DoorDash and Uber are making a lot of money right now. This is Dave Lee from the FT.

David Lee
Typically, the story comes from those businesses that, as we open up parts of the business that had suffered during the pandemic, are coming back. And then some parts of those companies that have excelled during the pandemic are sticking around.

Marc Filipino
So Uber, DoorDash and Lyft all just reported very strong earnings for the last quarter. Uber had its first-ever cash flow positive quarter, which means more money coming in than going out. But not only is the demand for these companies high, but their prices are also rising.

David Lee
We are seeing the change from that time when they were happy to make a loss on the rides in order to get the service growth and worry about profits later. Well, we are now later, the later. And I mean, if you compare even some kind of pre-pandemic price to where we are now, you can see the average price per mile on Uber has gone from $2.32 to $2.83 $. The average price per mile on Lyft rose from $2.14 to $2.67. But it seems the era of the gig economy making things cheaper for millennials like you and me seems sadly over.

Marc Filipino
And there is another reason why the profits of these companies are higher. Dave says they became more efficient and dropped a lot of stuff.

David Lee
Uber had a self-driving division, they got rid of that, fix that. I mean, at one point Uber even tried to watch a flying car, for screaming out loud. So now investors are saying, how about not spending so much money? We are seeing slowdowns in hiring. We are seeing hiring freezes in some cases. For Lyft, companies, you know, budget like anyone else would. They just make sure their numbers add up by saving where they can.

Marc Filipino
It’s our correspondent in San Francisco, Dave Lee.

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For much of the past year, the FT’s Patrick McGee has spoken to more than a dozen current and former Apple employees. They worked, or worked in different divisions and different states, and they all say they were harassed, abused or even sexually assaulted. When they went to Apple’s human resources department, they said they had hit a wall.

Patrick McGee
Apple treated the claims like, what’s the risk to our reputation here?

Marc Filipino
Patrick joins me now to talk more about this story. Hi Patrick.

Patrick McGee
Hello marc.

Marc Filipino
So one of the women you spoke to had a horrific story, didn’t she? She said she went out for a platonic drink with a colleague one night. She finds herself at home, she falls asleep and she wakes up to find him, taking pictures of her without her shirt on. He had taken off her shirt and her bra. She eventually reports it to Apple’s human resources department. What happens next?

Patrick McGee
Yeah. So she went to HR and she wasn’t asking, you know, for him to be punished or anything like that. It was actually years after the fact and it was after the #MeToo movement. And she literally wanted to notify HR. But the conversation gets really stiff and defensive, where Apple’s immediate concern seems to be, is this going to hurt Apple? So they say to him: “. . . as an Apple employee, he did not violate any policies while working at Apple. And because he hasn’t violated any policies, we won’t restrict him from seeking employment opportunities that match his goals and interests. And on the right, she’s just flabbergasted by that response. Like, there just seems to be this tin ear when it comes to, like, empathy.

Marc Filipino
So Patrick, you talked to 14 other women, 15 in all. What did you learn from their stories?

Patrick McGee
Yeah. 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 to speak publicly about workplace harassment and discrimination, even though it is a legal right. You just had this feeling time and time again that regardless of geography, regardless of department, if a woman had a particular misconduct complaint against a co-worker or against a manager, Apple’s human resources department was more interested to bury it, to protect the manager, rather than really listening to the employee.

Marc Filipino
Is that a big deal, Patrick? I mean, you’re talking to 15 women, and Apple has over 150,000 employees worldwide. Is this a general problem?

Patrick McGee
Yeah. I mean, I don’t think Apple has a pervasive problem here. I think they have a separate problem. I’m not saying that the whole culture of Apple needs to be overhauled or anything like that, am I? Like the top executives of Apple and Tim Cook, I mean, they win various awards and I’m sure they deserve it. But again, this is a massive organization and when you get to six levels deep in the organization, you know, where managers aren’t household names.

Marc Filipino
What about culturally? Is there a bigger cultural problem at Apple?

Patrick McGee
So you’re focusing on the biggest thing that I had to deal with in my reporting, which is that what became really meaningful was talking to a former HR professional at Apple who talked about the dark sides, as he called them, to Apple’s secret culture, right? Apple has a famous secret culture. He doesn’t want you to know what the next iPhone will look like. But the general claim of many people is that they have extended this shroud of secrecy into areas like workplace harassment and discrimination. So women with a problem with their manager, for example, had a natural tendency to think there was something wrong with them, rather than a problem with Apple’s managers and management processes. training. And perhaps I should point out that Apple, in responding to these allegations, has committed to changing its training and processes as a result of the article. And, you know, if that’s a genuine statement, okay, then one should feel encouraged by that.

Marc Filipino
Patrick McGee is the FT’s correspondent in San Francisco. Thank you very much for your report, Patrick.

Patrick McGee
Well done, Mark.

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Marc Filipino
You can read more about all these stories on FT.com. This has been your daily press briefing on FT. Be sure to check back tomorrow for the latest trade news.

This transcript was generated automatically. If by any chance there is an error, please send the details for a correction to: [email protected]. We will do our best to make the change as soon as possible.

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