Billionaire American businessman Jeff Bezos walks with Bob Smith, president and CEO of Blue Origin, when Bezos flew to the edge of space on the company’s inaugural flight to Van Horn, Texas, USA, July 20, 2021.
Joe Skipper | Reuters
JF Bezos’ Blue Origin is suffering from a higher turnover rate, CNBC has learned, the space company is losing talent mainly due to the pressure to return to the office of CEO Bob Smith.
A spokesman for Blue Origin told CNBC that the annual rate of decline did not “exceed 12.7%”, which measures workers’ losses in 12 months.
Although this is significantly above the company’s general decline of 8% to 9% a year, multiple people familiar with the situation told CNBC that, measured from the beginning of the calendar year, it has already exceeded 20% for 2021 – citing the recent departure of employees Includes data from a few months ago.
A spokesman for Blue Origin said in a statement: “We are comparing the rate of commitment reported by other companies to what many call the ‘Great Resignation’.
Blue Origin has about 1,000,000 employees, with departures representing hundreds of employees this year. A company spokesman told CNBC that Blue Origin’s total headcount grew to just 450 people from the end of last year, up from 3,503 employees to 3,957 as of August.
One person explained that losing talent caused huge delays for Blue Origin programs, as it could take six months to a year to get new recruits at speed.
Blue Origin’s Talent Deportation, which CNBC reported in August, includes top-down employees in the corporate hierarchy:
- New Shepard SVP Steve Bennett
- Chief of Mission Assurance Jeff Ashby
- Senior Director of Crystal Friend Recruitment
- National Security Sales Director Scott Jacobs
- New Glenn’s senior directors are Jim Centaur, Bob Aces and Todd Biequist
- New Glenn senior finance manager Bill Scammel
Several people told CNBC that the departures were a direct reflection of Smith’s leadership – contrary to what they praised for the passion and creativity of their colleagues within the company. Those who spoke to CNBC did so on condition of anonymity, fearing reprisals or job losses.
The experiences of those who spoke to CNBC, and their views on the company’s management, in many ways matched those of 21 current and former employees who published an essay on Blue Origin on Thursday, alleging a “toxic” work culture. In a company-wide email received by CNBC, the article internally urged Smith to “reassure” the company and insist that “there is no tolerance for any kind of discrimination or harassment.”
Smith runs the company for founder Bezos, who hired him from Honeywell in 2017. Many who left Blue Origin did so unintentionally, learned CNBC, loved the potential of technology, and bought into Bezos’ perspective.
Many people stressed that exile is a huge concern for Blue Origin, as the aerospace industry has become incredibly competitive. In addition, its headquarters in Seattle suburb Kent, Washington means that the best engineers can find high-paying jobs in other sectors. Finding the right new recruit can be even more difficult without Freund leaving in September.
Some business units have suffered more losses than others: the New Shepherd program has run out of people, one person said. With a source describing budgeting at Blue Origin as a two-night dream, the finance team has also lost permanent staff. An example of the budget issues told CNBC was the Jacqueline ship, which Blue Origin bought from the Swedish shipping company Stena Line to turn its New Glen rocket boosters into a landing platform. One person said Jacqueline had suffered a lot during the re-establishment, and the project was 21% more than the budget, according to another – who mentioned that the delay was related to the Covid epidemic.
Lisa Graham, the company’s vice president of finance, is leaving next week, two acquaintances said.
Blue Origin’s Human Resources team would conduct exit interviews for anyone leaving the company. But human rights representatives have largely stopped doing it, with two saying some are still “drowning in people” with exit interviews.
Push back to the office
Blue Origin is headquartered in Kent, Washington.
Central sticking points, and because of those who have recently left, Smith was under intense pressure this year to get all Blue Origin employees back to office. The plan came despite a petition signed by hundreds of employees to implement at least one hybrid work model, known as “Blue Back Together” – a petition from acquaintances that Smith never acknowledged.
Instead, Smith has spent millions of dollars this year renting an extension office space near the company’s headquarters, sources told CNBC. He wants every employee to return to office by September, there is no flexibility for the hybrid model – and there are plans to effectively ban remote work, these sources said.
In addition, as part of Smith’s rush to get employees back into office, people familiar with the matter said that in May the CEO launched a program to publish a covid vaccine with a “green dot” on the company’s badges. But Smith’s initiative was based on honest belief, multiple people say. Employees were only asked to add their badges to the office receptionist for the round green sticker, no proof of vaccination required. Blue Origin later added a sheet of paper for employees to sign before getting the green dot, but still didn’t have to show anyone the vaccine card or indicate when they got it.
Blue Origin founder Jeff Bezos spoke to company employees at a launch preparation meeting in 2019.
When Bezos was a supporter of bringing back workers in the spring, an acquaintance said he later dismissed Smith’s push. With the exception of a limited number of essential staff, Blue Origin’s staff is continuing to work quite remotely, two sources said, with a full return to office now delayed in January.
Smith: ‘You can’t teach me anything’
Bob Smith, CEO of Blue Origin LLC, speaks at TechCrunch Disruption 2019 in San Francisco, California, USA on Wednesday, October 2, 2019.
David Paul Morris | Bloomberg | Getty Images
Bezos hired Smith as his right-hand man and made day-to-day decisions, playing a similar role to SpaceX President and COO Guinness Shotwell under Musk.
When Blue Origin’s chief operating officer left late last year, Smith quickly increased Blue Origin’s core numbers, from just 1,000 employees when he joined.
The company’s biggest win this year was the first Crew New Shepard launch, which was a smooth success. But the milestone of the suborbital rocket came a few years later, with Blue Origin previously saying that the New Shepard would launch to humans by the end of 2017.
On July 20, 2021, Jeff Bezos and his crew pose in front of the Blue Origin’s New Shepard rocket.
Michael Schitz | CNBC
New Glenn is a reusable, next-generation rocket that is preparing to launch the Blue Origin orbit, a market dominated by SpaceX and the United Launch Alliance. The rocket was originally scheduled for launch in 2020, but was delayed until at least the fourth quarter of 2022.
BE-4, the epicenter of Blue Origin’s rocket engine stability, was supposed to be ready by 2017, but due to numerous developmental issues, the company has yet to deliver its first flight-ready engine. Significantly, the BE-4 program is important outside the company, as ULA has signed on to use its Vulcan rockets to use power engines, choosing Blue Origin over Aerojet Rocketdyne as its supplier U ULA has long been a valuable and classified spacecraft as a trusted launch provider for the Pentagon.
The ULA agreement stipulates that Blue Origin will deliver the first two flight-ready BE-4 engines by April 2020, a person familiar with the agreement told CNBC. But, in early 2019, the company’s engine team presented an update to Smith and every component of the BE-4 engine had a technical problem with it, the person said. The company has not yet delivered those flight-ready BE-4 engines to the ULA.
Blue Origin tests one of the BE-4 rocket engines that the company is developing for its new Glen rocket launch.
Origin of blue | gif by gifthesheetztweetz
Blue Origin is also embroiled in a fierce court battle after losing the NASA award to the multi-billion-dollar Lunar Lander deal with SpaceX.
Delays and contract loss pressures may explain why some see Smith’s leadership style as a terrible or heavy hand. But a person close to the CEO emphasizes the disparity between the expectations of Smith and the Washington-based workforce যারা who are often very competitive, and don’t need to move to find similarly technical, well-paying jobs.
The man also pointed out the inconsistencies of the team surrounding Smith. At one meeting, for example, Smith told his team, “You don’t know anything about this that you don’t already know,” according to two people familiar with the matter.
Another person close to Smith told CNBC that at one point the relationship between the CEO and his senior team became so bad that Blue Origin hired a leadership consultant to examine the situation. After an hour-long interview with Smith’s executive team, the consultant began presenting their views to Smith: “The consensus of your senior leadership team is that you are a micro-manager.”
Smith simply replied: “Do you think you’re telling me something I don’t know? I’m proud of it, and have no desire to change,” according to those who heard about the two and a third in the meeting.
A spokesman for Blue Origin denied the allegations in a statement, saying: “We have verified with your entire leadership team and leadership advisors and we can be 100% sure that these statements were never made.”
Although the exact turnover of Blue Origin has not been announced before, there is widespread internal annoyance for Smith. This is reflected in the job site Glasdor, which shows that only 19% of employees approve of Smith’s leadership. This is far less than the approval for other space executives, as Glasdor shows that 91% of SpaceX employees are approved by CEO Elon Musk and 77% by United Launch Alliance CEO Tory Bruno.
Bezos, who is investing billions in Blue Origin through the sale of Amazon stock, has yet to show that he is dissatisfied with Smith.
Bezos has begun spending more time with his space company, CNBC reported Monday. Two people familiar with his involvement said Bezos was technically far-sighted, with a deep understanding of spacecraft and rockets. However, those people further said that there is no possibility of Bezos Blue Origin deciding to run fulltime.
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