A blog about business and economics.

Nov. 6 2015 4:05 PM

Want a Jetpack Like Those Guys in Dubai? Too Bad.

This post originally appeared in Inc.

If you spent any time poking around online recently, you probably have already seen the jaw-dropping video of a couple of guys in jetpacks flying with a jet 4,000 feet over Dubai (If not, check it out below). It's amazing stuff from the daredevil duo of Yves Rossy and Vince Reffet (and not at all a bad marketing move from Emirates), but if you're like me, it also raised one important question—where'd they get those gizmos, and can I get one too?

Turns out jetpacks—that long-promised but long-delayed emblem of futuristic technology—may not be the sole province of sci-fi and little kids' fantasies for long. As we reported here on a few years back, Kiwi inventor and entrepreneur Glenn Martin has been tinkering with his design for a personal jetpack in his garage for more than 30 years, using his wife as a test pilot. How have things been coming along since that article?

Pretty well, it seems. Martin's company had a successful IPO in February of this year. "Martin Aircraft, was valued at more than $100 million when it listed on the Australian Securities Exchange, after securing a cornerstone investment worth up to $50 million from Chinese aerospace group Kuang-Chi Science," the Sydney Morning Herald reported at the time.

Then, in June, Martin Aircraft announced that it will begin selling its jetpacks next year at a cost of about $150,000. The latest version was on display at the Paris Airshow. It can fly for more than 30 minutes at up to 45 miles per hour and at altitudes of up to 3,000 feet or so. The company's CEO claims their first target market isn't thrill seekers but first responders for use in search and rescue applications, the Daily Mail reports. (There are plenty more technical details in the article if you're curious.)

So now we finally have a reply to that endlessly reoccurring question, “Where's my jetpack?” Answer: It's in development in New Zealand, and it'll run you a pretty penny (firefighters please move to the front of the line).

Of course, not everyone is sold on the charms of the personal jetpack. Astro Teller, chief of Google's innovation laboratory, Google X, shot down the idea of the company working on jetpacks at TechCrunch Disrupt. "We could have a concept that, wouldn't it be great to have a jetpack that isn't also a death trap?," he mused, before continuing, "We work on it, we work on it, and nope ... The real problem is that it's so power-inefficient it would get about a quarter of a mile per gallon. And it would be as loud as a motorcycle, and we thought, for now, that's a show-stopper."

While in the UK's Guardian newspaper Dean Burnett has also thrown cold water on the idea for similarly practical reasons. "You think it's easy to make a jetpack? After all, we've invented jets, we've invented backpacks, what's the problem? It should be straightforward ... Sadly, it's nowhere near that simple," he writes in the entertainingly crotchety article.

"The classic image of a jetpack is the one in the Rocketeer. It conjures the image of someone rising into the air with pillars of fire strapped to their back, as with genuine rockets. To answer what's wrong with that, imagine a powerful blowtorch focused on your legs for a prolonged period. People complain about getting a sore nether region from bicycle seats, so it's unlikely anyone would put up with liquefying their skin in the name of convenient transport," it concludes.

Still despite the low fuel economy and possible skin-liquefying side effects of jetpack travel, the Internet's frenzied reaction to the Dubai stunt indicates that mere practicalities aren't going to keep up from dreaming of personalized flight anytime soon. Maybe Martin is just crazy enough to benefit from our collective madness.

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Nov. 6 2015 1:53 PM

Goldman Sachs Takes a Stab at Making Banking a Little Less Soul-Crushing

In the past few years, it’s become trendy to periodically wonder whether Silicon Valley is the new Wall Street. Such ruminations are often triggered by the latest reports on where newly minted college grads are headed, which really means Harvard kids. And yikes, was the banking sector in for a tough break this year. Over at Harvard Business School, a mere 4 percent of the class of 2015 said they intended to work at a bank after graduating in May. Among those respondents, only one was in the top 5 percent of the class. Tech, on the other hand, was attracting a reported 16 percent of Harvard’s MBAs, six of whom were at the top of the class.

Perhaps worse than where such elite grads were defecting to, though, was why. Here’s Bloomberg Business with the bad news:

Ruined weekends, PowerPoint drudgery and overnight shifts in Manhattan skyscrapers once were a point of pride for the Harvard Business School graduates who went to Wall Street. Now young stars hold heads high about how lucrative and healthy their lives will be—elsewhere.
“People used to brag and say, ‘Oh yeah, 21-hour days, seven days a week for eight months,’ that was a badge of honor,” said Kiran Gandhi, who like others in this year’s class applied to technology companies. “The humble brag is now, ‘Oh yeah, I work 9 to 5, I get paid a ton of money, and I have a great life.’ It’s green juice from vats in the office and amazing organic iced coffee cold-brewed—the quality of life.”

Yes, would-be millennial Wall Streeters want—gulp—work-life balance. Or at least the chance to work in a fun, cool, Google-esque office where work-life balance, if not exactly a real thing, at least seems gestured at thanks to free meals, nap rooms, yoga classes, and other perks. This, as you can imagine, puts the big banks of Wall Street in a tough position. They have long relied on money and prestige—but certainly not work-life balance—to attract and retain top talent.

In late 2013, Goldman Sachs took an early stab at trying to improve this, announcing that young investment bankers would be encouraged—even instructed—to take Saturdays off. Similar announcements quickly followed from other big banks, and the “protected weekend” was born. Now, Goldman is once again leading the charge to better things for junior bankers. From the Wall Street Journal:

Just a few years after scrapping its two-year analyst program for investment bankers, Goldman is again rethinking the way it structures bankers’ early years at the firm. The bank is dangling carrots, including promises to speed the path to promotions and eliminating some of the grunt work that often falls to younger employees.

That’s according to a memo Goldman sent around Thursday, and the result of what the Journal calls “soul-searching among banks” to “address grievances to keep young people on board.” Specific plans at Goldman include IDing earlier on which bankers are in line for promotions, creating a third associate year, and allowing bankers who stay on for that third year to rotate through another business division, possibly elsewhere in the world. Goldman will accelerate the path from associate to vice president to five and a half years from six and a half. And it intends to decrease the amount of grunt work analysts traditionally do by automating the most rote tasks.

Whether it will work is anyone’s guess. But it seems like a good, earnest start. When May comes around, we’ll check the Harvard MBA numbers.

Nov. 6 2015 10:18 AM

Why You Personally Probably Shouldn’t Care About This Month’s Jobs Report

After a couple of down months, the U.S. labor market showed more signs of life in October, as employers added 271,000 jobs to their payrolls according to the Bureau of Labor Statistics. (They tacked on just 153,000 in August and 137,000 in September, per this month's revisions.) The unemployment rate fell a tiny bit to 5 percent while participation stayed even after a drop during September. Average hourly wage growth also, notably, hit 2.5 percent year over year, which Bloomberg's Joe Weisenthal notes is the fastest pace since 2009.

This is mostly encouraging. But I'm going to spare you the biblical exegesis of this month's numbers, and instead revisit some comments I made in September, when the figures had everybody feeling very ill at ease:

Recent labor market data has been pretty worrisome. For the first half of the year, the U.S. averaged 213,000 new jobs per month. In July, it added a healthy 223,000. But these past two months, the country has averaged just 139,000. That sounds ominous—like a potential sign the global troubles we've watched radiate from China and other emerging markets might be starting to touch not just stocks, but the real economy here in the U.S. That said, the job market has suffered through similar cold snaps before warming up again, and it's always possible we're looking at a blip. Also, remember, September's figures are going to be revised.

It looks like we may have been experiencing a blip after all. Or maybe this month is the blip, a momentary bit of warming before the cold sets back in. It's hard to say. The bigger point is that, while it's very easy to get worked up over individual BLS releases (especially if you're job is to make predictions about the Federal Reserve and trade on them), for most people, it doesn't make a lot of sense to obsess over them on a month-by-month basis, especially since the first numbers we see are always revised later on. At this point, we're a bit behind last year's pace for job growth, averaging 206,000 new jobs per month versus 236,000 as of October 2014, but the market still seems fairly healthy. My guess is that may leave our monetary policymakers a bit more inclined to raise interest rates soon. But, like most jobs reports, this one is a blurry snapshot of a train as it moves down a very long track. 

Nov. 5 2015 12:19 PM

The Full Text of the Trans-Pacific Partnership Is Finally Online

The full text of the Trans-Pacific Partnership trade deal is finally available to the public after the Obama administration released it early Thursday. You can find a PDF version here, and a slightly more Internet-friendly one on Medium.

TPP is a hotly contested deal in the United States that touches 12 countries and about 40 percent of the global economy. Its economic implications are vast. Supporters of TPP tout its ability to open up overseas markets for U.S. companies, while detractors worry that it will cause job losses and depress wages by increasing competition from low-wage workers in other parts of the world. Representatives from the 12 nations in the deal reached an agreement on it last month. Now that the White House has released the full text, it enters into a 90-day review period.

That TPP had previously been unavailable to the public was almost as controversial as the deal itself. In lieu of actual documents, the public was left with whatever information could be gleaned from the government and a few drafts published by Wikileaks. Here’s Slate’s Dan Gillmor on this point back in April:

You might expect that a deal affecting up to 40 percent of the global economy would get near-saturation coverage from political and business journalists. Wishful thinking, as usual. ... Oh, there have been some stabs at serious analysis in the press, but most of the coverage has been the standard blend of stenography and rah-rah fluff. New York Times ubercommentator Thomas Friedman, a TPP supporter, transcended self-parody when he said on TV that he supported another trade deal without knowing what was in it, because “I just knew two words: free trade.”

At last, we can all know a good bit more than that.

Nov. 4 2015 5:34 PM

Harvard Professor Explains Why It’s Totally OK for Law Schools to Suck Money Out of Unqualified Students

The debate over law schools can sometimes feel a bit rote. Critics say they scam students by promising high-paying careers that never materialize. Defenders say that, actually, J.D.s do quite a bit better for themselves on the job market than many of the most harrowing stories would suggest.

So give Noah Feldman some points for creativity. In a recent Bloomberg View column, the Harvard Law professor mounted one of the most straightforward and eloquent defenses of ripping off students I have ever encountered.

To be fair, Feldman probably wouldn't describe his argument quite in those terms. At the moment, there is mounting evidence that law schools, desperate to put warm bodies in their classrooms, have started admitting a great number of students whose low LSAT scores suggest they will have trouble passing a state bar exam. This is problematic, because without passing a state bar exam, you can't practice law in most of the country. And so some have suggested that maybe, just maybe, admissions officers ought to tighten their standards somewhat at the cost of revenue, rather than let in anybody willing to take on the debt necessary to cut a tuition check.

Feldman finds this "growing conventional wisdom" that schools shouldn't "admit students who are statistically uncertain to pass the bar" deeply troublesome. "This view assumes that it's up to the law schools to make the threshold decision paternalistically, 'saving' naive college graduates from pursuing the dream of becoming lawyers when there’s no guarantee that they'll succeed," he writes. "It treats standardized test scores as destiny and correlation-based studies as gospel."

In Feldman's view, denying applicants with bottom-basement LSAT scores the opportunity to attend law school at great personal expense would amount to the "infantalization" of young college graduates. "Do we really need to protect people from trying to achieve their dreams?" he asks. Looked at the right way, low bar-passage rates could even be considered a positive sign. "If all law students were passing the bar, it would be a sign that law schools weren't taking a chance on students at the margin of the capacity to succeed," Feldman writes.

In other words, law schools should be lauded for extracting money from the students least prepared to excel at them. Bold stance, professor.

It's worth noting here that Feldman's view directly contradicts the American Bar Association's accreditation rules, which explicitly state: "A law school shall not admit an applicant who does not appear capable of satisfactorily completing its program of legal education and being admitted to the bar." In other words, the ABA doesn't care about your hopes and dreams of becoming Jack McCoy if you don't stand a chance of becoming a licensed attorney. This is quite reasonable. Academics may wax lyrical about all the lovely things one can do with a law degree (Feldman helpfully reminds us that Harvard Law grads include hedge-fund managers and presidents), but in the end, law schools mostly exist to mint lawyers. And insofar as they fail to do that, they're whiffing on their most basic function. The problem with the ABA standards, as I've written before, is that there isn't much agreement yet on what counts as an unacceptably low LSAT score. That's why many would like to see schools start by being more transparent about the relationship between standardized test scores and bar passage so students can better decide for themselves whether a J.D. is right for them.

Which brings us to the bigger issues.

First, Feldman is very much arguing against a straw man. Nobody, to my knowledge, has suggested that law schools adopt a minimum LSAT score. Nor is anyone arguing that institutions should have a 100 percent bar-passage rate. Law School Transparency, the advocacy group that has spearheaded this whole debate, argues that the threshold should essentially be raised to 85 percent (the current formula is complicated and easily gamed but is meant to ensure that roughly 75 percent of those who take the bar pass in a typical year).

Second, while some law professors may be comfortable watching their former students fail the bar while carrying six figures worth of debt, nobody in their right mind would call that a socially or economically optimal outcome. (Hint: Most 25-year-olds who attend a bottom-tier law school and can't cut it on a licensing exam aren't headed for the White House.*) Given that law schools are basically funded through the federal student loan program, a lot of people would argue that they have some broader social responsibility not to act like parasites. And if they fail to meet said responsibility, the government might just start exploring ways to intervene.

The point of raising admissions standards isn't to push out every last borderline student. It's to discourage schools from keeping themselves in business by preying on obviously incapable applicants, who may not have any idea what they're getting into when they borrow $100,000 for a potentially useless degree. Maybe that's too "paternalistic" for Feldman. But the entire practice of law is predicated on the idea that attorneys have a duty to protect their clients' best interests and advise them against obviously self-destructive behavior. It seems reasonable to ask law schools to abide by a similar set of ethics and refrain from ripping off students who don't have a prayer of succeeding in the career they're supposedly preparing for.

*Insert Hillary Clinton failing the bar joke here.

Nov. 4 2015 4:30 PM

After Offending All of San Francisco, Airbnb Still Trounced the Hotel Industry on Election Day

Airbnb is taking a victory lap after defeating San Francisco’s Proposition F, a ballot measure that would have tightly regulated short-term home rentals in the city. The measure, which failed late Tuesday night with 55 percent of votes cast against it, would have limited hosts to renting their units on Airbnb for 75 days a year as well as encouraged hosts’ neighbors to report and sue them for regulatory violations. Prop F’s supporters invested more than $1.5 million in promoting the initiative; Airbnb spent more than $8 million opposing it.

On its blog, Airbnb is touting the vote as a “victory for the middle class.” The company says it had conversations with more than 105,000 voters and knocked on 285,000 doors leading up to the vote. “In this election, the Airbnb San Francisco home share community became a movement,” writes Chris Lehane, a former Clinton administration adviser and Airbnb’s recently appointed head of policy. (Lehane continued to make use of “movement” terminology during a Prop F debriefing Airbnb held on Wednesday afternoon, including the memorable comment, “A movement is a little like riding a tiger.”)

That Airbnb pulled off the win is even more impressive when you consider that, only two weeks earlier, the company managed to offend just about all of San Francisco with a tone-deaf ad campaign. What’s it say that Airbnb was able to bounce back from its marketing mishap so quickly? Perhaps that the things that generate outrage on the Internet aren’t the same as the ones that do at the ballot. Perhaps that—as Airbnb had insisted—support for Prop F came mainly from the hotel industry and didn’t reflect the views of mainstream San Franciscans. Perhaps that the city’s community of Airbnb hosts, who the company claims each earn a “typical” $11,000 on the platform a year, is truly a formidable voting force. Or perhaps that, more simply, people like Airbnb more than they resent the tech industry.

The Prop F vote certainly won’t resolve all of Airbnb’s frictions with San Francisco. At the debrief, the company faced tough questions about its stance on weeding out bad actors on its platform and cooperating with the city to enforce existing regulations. Lehane dodged a question about whether Airbnb should spend more energy solving these problems, and less lashing out at its critics. “We work with our community. We educate our community. The city works with us,” Lehane said, with a hint of defensiveness. “There are things that both sides could do better.” In New York City, where Airbnb’s presence is probably even more hotly contested, the company and regulators are reportedly close to reaching a data-sharing agreement that would help officials crack down on so-called illegal hotels.

In San Francisco specifically, the debate over Airbnb is also sure to continue so long as the city faces soaring rents and a shortage of housing, and so long as people who live there tend to blame tech for the city’s problems. Based on how Tuesday’s election went on several counts, those messes will be around for quite a while. And so the most important takeaway from Airbnb’s win in San Francisco actually has very little to do with the city or its housing policies. It’s that the vote proved how Airbnb has mastered grassroots lobbying, even in a place where its relationship with locals is complicated at best. Over at Wonkblog, Emily Badger frames it like this: More people in San Francisco have used Airbnb than turned out to Tuesday’s election.

In the on-demand or “sharing” economy, where companies favor algorithms and two-sided platforms over traditional inventory, the ability to build a vast consumer base and harness it for political gain is arguably a company’s biggest asset. Uber has been able to expand rapidly and accrue a valuation of more than $50 billion in no small part because it excels at this. After Tuesday’s vote in San Francisco, there shouldn’t be any doubt that Airbnb does too.

Nov. 4 2015 8:07 AM

Handy’s Corner of the Gig Economy Is a Mess. Doesn’t Bother Startup Investors!

The startup world is full of ironies and poetic justices. The bubbly race to wash your clothes. The club of billion-dollar “unicorns” that boasts more than 100 members. And the undeniably messy market for on-demand cleanings and home services.

In recent months, the home-services market has repeatedly proved one of the riskiest and most muddled in the burgeoning “gig” economy. The clearest evidence of this came in mid-July, when Uber-but-for-cleaning platform Homejoy announced it was shutting down. At the time, the company attributed its exit to problems with raising money and to a lawsuit over its employment practices; other reports since have traced the collapse to substantial losses, poor customer retention, costly expansion, and Homejoy’s inability to keep its best workers on the platform.

Similar problems have plagued Handy, another Uber-but-for of the home-services sector, and Homejoy’s main competitor before it went under. Like Homejoy, Handy poured money into scaling up its operation, spending tens of thousands of dollars a week—if not more—to onboard cleaners. Like Homejoy, Handy struggled to retain those cleaners, with 20 to 40 percent becoming inactive after two to three months. Like Homejoy, Handy is in litigation over its independent contractor-based business model. On top of that, Handy has faced tough criticism about its customer service—in particular, a sign-up system that automatically enrolled users in repeat bookings and made it extremely difficult to cancel them.

And yet the gig economy keeps chugging. Handy said Monday that it had raised $50 million in a Series C funding round led by Fidelity Management and several of its current investors. That brings the company’s total funding to $110 million, for an unofficial valuation of around $500 million.

In its press release, Handy points to its 1 million-plus bookings (a milestone it celebrated over the summer) and notes that 80 percent of them come from “loyal, repeat customers.” Presumably a good deal of the company’s valuation and new funding is tied up in this claim—repeat customers are much more likely to actually pay off than one-time users—though the fact starts to sound less compelling when you wonder how many of the 80 percent were repeatedly using Handy of their own volition, and not because they couldn’t cancel those automatic recurring bookings.

“Handy has demonstrated to consumers that it is the company to trust when it comes to finding professionals to take care of their homes,” Handy co-founder Umang Dua says in the release. “Professionals love the flexibility, high-paying jobs and high demand for their services, while consumers enjoy the convenience and high quality.” It’s nice PR boilerplate that becomes less convincing once you consider the cleaners who have filed lawsuits against Handy, the customers stuck with follow-up bookings they didn’t want, and the customer-experience employees at Handy’s headquarters who had their jobs outsourced and were fired en masse between late 2014 and early 2015. For more on most of that, see my Slate story from this summer.

On the other hand, it’s possible that Handy, in the spirit of its sector, has started cleaning up its act. In late August, a former Handy employee notified me that the company had finally reviewed its compensation and payroll practices and issued backpay to some customer-experience employees for their rest periods. As part of that, back-wage recipients were asked to “stipulate and agree that my accepting this payment does not constitute, for any purpose whatsoever, either directly or indirectly, an admission of any violation of law or contract or any other legal obligation whatsoever by Handy,” according to a copy of one agreement provided to Slate. They also released Handy from “any and all individual and/or class claims under the New York Labor Law and, to the extent allowable, any other federal, state or local law, related to the payment of wages, benefits or other compensation related to my employment with Handy,” so you have to assume that’s something the company was nervous about.

Could such changes, plus the Homejoy exit, be enough to pave Handy’s way toward establishing a profitable, sustainable business? Or is the market for home-cleaning and other household services fundamentally too tough? Those are questions that as of yet don’t seem to have clear answers. For now, though, Handy doesn’t need to convince the world one way or another. It just needs metrics that are aspirational enough to attract a few investors—to keep the cash flowing in from one end to be burnt up on the other. Fifty million dollars might not feel like much compared with the $1 billion rounds that Uber raises with casual regularity. But for a company in a space as murky and fraught as Handy’s, it’s an equally big vote of confidence.

Nov. 4 2015 1:11 AM

Obamacare Has Been Great for Kentucky. Now the State Has Elected a Governor Who Wants to Trash It.

Kentucky voters elected Republican businessman Matt Bevin as their new governor on Tuesday, which sadly means a whole lot of people are probably about to lose their health insurance. The Tea Party favorite has promised to roll back pieces of the Affordable Care Act that have helped slash Kentucky's uninsured rate by more than half according to Gallup, the biggest drop of any state in the country since the law's major planks were implemented.

Oh well. 'Twas a happy story while it lasted.  

How much Bevin actually plans to upend health reform in Kentucky is still a bit unclear. He has promised to abolish the state-run marketplace, Kynect, and move customers to the federal exchange, which frankly shouldn't be that huge a deal. Much more importantly, he has vowed to reverse, or at least significantly curtail, the state's expansion of Medicaid, which extended health coverage to more than 400,000 low-income residents.

John Oliver aired a pretty funny segment skewering Bevin's contradictory statements on what, exactly, he would do with the Medicaid expansion. But by now he has pretty clearly stated that he intends to seek a section 1115 waiver, similar to what states like Indiana and Pennsylvania have received, that would allow Kentucky to "experiement" with a more restrictive version of the program, probably involving more private insurance options. He explained his thinking at length during a September interview with Lousiville's NPR affiliate, WFPL.

Host: You said you're going to draw down the number of people on Medicaid in the state. What's your plan for that?
Bevin: Of necessity it will have to happen. Because there literally is no ability for us from a budgetary standpoint to afford 25 to 30 percent of Kentuckians on Medicaid ...
Of necessity we must scale this back. The way you do this is just to make it not as accessible for folks going forward. There’s re-enrollment for Medicaid, just as there is for any number of other programs, etc. So we would not allow people to re-enroll, going forward, at 138% of the federal poverty level. Is that done immediately? That will be done in a uniform fashion because you can’t just simply end it on day one. You have to of necessity start to do this as people enroll anyhow. So we are going to scale it back. We cannot afford to do otherwise.

Given that states have typically sought 1115 waivers as a condition for joining the Medicaid expansion, rather than an ex post facto maneuver to change to it, it'll be interesting to see what sorts of alterations Bevin manages to make. Big picture, though: It doesn't quite look like the end of Obamacare in Kentucky, as some of the law's supporters seem to fear. Just the beginning of a stingier, maybe less effective version.  

Nov. 3 2015 4:17 PM

21st Century Fox’s Takeover of National Geographic Just Got Off to an Ugly Start—With Layoffs

Employees across the National Geographic Society came into work Tuesday knowing only that they could expect “information about your employment status,” based on a vague email they had received from the organization's president on Monday. By late morning, dozens of them had been laid off, including photo editors, an online science news writer, members of the TV channels, members of the digital NG Kids team, members of the legal team, administrative employees, and one higher-up position in graphics, multiple people who work there told me. It's not yet clear how many layoffs there will be in total.

The bloodletting follows the September news that 21st Century Fox had purchased a majority stake in National Geographic. With the $725 million deal, Fox now effectively owns all of National Geographic’s media brands, including its iconic wildlife magazine, cable TV channels, digital properties, and publishing operations in a for-profit venture known as National Geographic Partners. In return, National Geographic was promised financial stability—no small thing when its media brands’ ad revenue had plummeted precariously.

The partnership separates the media outlets from the National Geographic Society's research arm, which will continue to operate as a nonprofit. The society will see its endowment double to $1 billion, allowing it to significantly expand its funding of scientific research, exploration, and education, according to National Geographic.

Since it was announced, the partnership had caused much hand-wringing among the media and lovers of the magazine, who worried for the fate of the society’s naturalist mission, as I wrote at the time. Not long after, National Geographic Society President and CEO Gary Knell expressed enthusiasm for the future of National Geographic and its various media brands. The takeover would "amplify, not change" the core message of Nat Geo, he told Fast Company.

But inside the organization, staffers have fretted over what would happen once Fox stepped in and took over. For a week now, there have been rumors among staff of impending layoffs, said an editor who asked not to be named. But the only official information employees had to go off of was an email Knell sent on Monday:

To all NGS Staff:
After very careful and serious consideration, we are ready to communicate how our restructuring and transformation will affect each employee at National Geographic. To that end, please make every effort to be available tomorrow, November 3rd, either in your regular work location, and/or by phone ...
Please watch your inbox for important information about your employment status tomorrow. 
I cannot thank you enough for your patience and hard work over the last few months. I am proud of how our teams and our organization have approached and responded to this transitional period. Looking ahead, I am confident National Geographic’s mission will be fulfilled in powerful, new and impactful ways, as we continue to change the world through science, exploration, education and storytelling.

On Tuesday, the anvil fell. By late morning, layoffs were being announced individually at National Geographic’s Washington, D.C., headquarters, the editor told me. One by one, staffers were taken to a private room to find out whether their jobs were safe. Some older employees were also offered retirement buyout offers, including magazine editors. By early afternoon, still more were waiting to receive emails informing them of the terms of their new jobs at either National Geographic Partners or the National Geographic Society.

At around noon, the mood was grim. There were “lots of little clusters of people standing around in the newsroom talking quietly,” the editor said. “There are some tears. Somber mood.” One photo editor who had been laid off tweeted:

Other members of the media expressed shock at the scope of the layoffs, including Donald Winslow,* an editor at News Photographer magazine:

Much like the takeover, the layoffs arrived with little warning. The magazine’s editor in chief, Susan Goldberg, told me back in September that all the staff—including her—had only found out about the new partnership a few days before it was officially announced to the public.

At the time, I also asked Goldberg whether she had any worries about the quality of National Geographic’s journalism going forward. She said no. “For us on the nonprofit side, it really helps stabilize our finance and helps us invest even more in the deep revelatory journalism and photography,” Goldberg said. “There will be no editorial interference at all with our brand. They believe in the kind of journalism that we do.”

Nat Geo is in a tough place, and financial security and editorial independence are nothing to snoot at. That said, it will be a lot harder to do the kind of journalism its fans know and love with far fewer talented people to do it.

*Correction, Nov. 3, 2015: This post originally misidentified News Photographer editor Donald Winslow as Donald Wilson.

Nov. 2 2015 4:03 PM

Chipotle E. Coli Outbreak Shuts 43 Restaurants in Washington State and Oregon

Chipotle has voluntarily shuttered 43 restaurants in Washington state and Oregon after six of its restaurants there were linked to E. coli–related illnesses. Health authorities are investigating 19 cases in Washington and three in Oregon. Eight people have been admitted to the hospital, but no deaths have been reported.

In a statement posted online Saturday, the Oregon Health Authority advised people who ate at a Chipotle location between Oct. 14 and Oct. 23 to see a doctor if they became ill with vomiting and bloody diarrhea. Illnesses from E. coli generally develop within three to four days of consuming the tainted food and resolve within a week. Occasionally, the illness can cause kidney failure, something more common in the elderly and children younger than 5.

Chris Arnold, Chipotle’s director of communications, said in a statement that the chain had shuttered restaurants around Seattle and Portland “out of an abundance of caution.” The company’s stock was down about 2.5 percent or almost $16 a share in afternoon trading on Monday.

As USA Today notes, the E. coli outbreak is the third major food safety problem Chipotle has run into this year:

In August, a Chipotle restaurant in Simi Valley, Calif. was temporarily closed after 80 customers and 18 employees reported systems of Norovirus. The restaurant was reopened after restaurant operators did a deep cleaning of the store.
Also in August, Minnesota health and agriculture officials reported an outbreak of salmonella among customers of 17 different Chipotle restaurants located primarily in the Twin Cities metro area. Minnesota Department of Health officials cited tomatoes as the cause of outbreak, which affected 64 customers. Nine of those sickened customers were hospitalized.

That doesn’t bode well for the “food with integrity” campaign Chipotle has spent much of this year pushing. The chain has tried to appeal to fast-casual diners by eliminating GMOs and additives from its menu. (This Halloween’s annual “boorito” promotion asked people to show up in costumes with “something unnecessary,” Chipotle’s nod to what it deemed the “spooky (and unnecessary) additives in typical fast food.”) Whether these initiatives are based in legitimate health concerns or shameless and unscientific pandering to skittish consumers is a separate issue. But even setting that aside: Chipotle will be a bit hard-pressed to explain how, while it was getting rid of additives and GMOs, it let E. coli, Norovirus, and salmonella slip by.