Turmoil at Bezos’ Blue Origin: Talent exodus came after CEO’s push for full return to the office

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  • Attrition in Jeff Bezos’s Blue Origin has climbed steadily, passing 20% ​​for the year, several people familiar with the situation told CNBC — with one trading as high as 27% as of August.
  • Several people told CNBC that the departure is a direct reflection on CEO Bob Smith’s leadership.
  • The central sticking point, and the reason cited by many who recently left, was Smith’s strong push for all Blue Origin employees to return to office this year.
  • During Smith’s tenure, the company has struggled to meet several key programs, which Blue Origin’s chief operating officer left at the end of last year.

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Jeff Bezos’s Blue Origin is suffering from a high turnover rate, CNBC has learned, with the space company losing talent primarily from pressure from CEO Bob Smith to return to office.

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A spokesperson for Blue Origin told CNBC that attrition “never exceeded 12.7 percent” at the annual rate, which measures personnel losses over 12 months.

While this is well above the company’s typical attrition of 8% to 9% per annum, several people familiar with the situation told CNBC that, when measured from the beginning of the calendar year, the attrition for 2021 already exceeded 20%. is — given that Blue Origin’s bottom tier rate includes data from the months before most recent employees left.

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A Blue Origin spokesperson said in a statement, “We are in comparison to those reported by other companies in what we’re calling ‘The Great Redesign.

Given that Blue Origin has about 4,000 employees, departures this year represent hundreds of personnel. A company spokesperson told CNBC that Blue Origin’s total workforce has increased by more than 450 people since the end of last year, from 3,503 employees in August to 3,957.

One person explained that losing talent leads to widespread delays in Blue Origin’s programs, as it can take six months to a year to accelerate new hiring.

Blue Origin’s brain drain, which CNBC reported in August, shows employees running from top to bottom in the corporate hierarchy, including:

  • New Shepard SVP Steve Bennett
  • Head of Mission Assurance Jeff Ashby
  • Crystal Freund Senior Director of Recruiting
  • National Security Sales Director Scott Jacobs
  • New Glenn Senior Directors Jim Santore, Bob Ess and Todd Biquisto
  • New Glenn Senior Finance Manager Bill Scammel

Many told CNBC that the departure is a direct reflection on Smith’s leadership—the exact opposite of the praise he gave for the passion and creativity of his peers within the company. People who spoke to CNBC spoke on the condition of anonymity, because of fear of retaliation or loss of job opportunities.

The experience of those who spoke to CNBC, and their view of the company’s management, in many ways matched those of the 21 current and former employees who on Thursday published an essay about Blue Origin calling it “toxic.” Work culture was charged. Smith responded internally to the essay in a company-wide email, which was obtained by CNBC, seeking to “reassure” the company and stressing that “any kind of discrimination or There is no tolerance for harassment.”

Smith runs the company for founder Bezos, who hired him from Honeywell in 2017. Many of those who left Blue Origin reluctantly do so, CNBC learned, loved the potential of the technology and bought into Bezos’s vision.

Many emphasized that migration is a big concern for Blue Origin, as the space industry has become incredibly competitive. Additionally, its headquarters in the Seattle suburb of Kent, Washington means that the best engineers can find high-paying work in other areas. It can also be difficult to find the right new employees without Freunds who left in September.

Some business units have suffered more than others: The New Shepard program has left a large number of people, one person said. The finance team has suffered frequent personnel losses, with one source describing the budget as a nightmare at Blue Origin. An example of budget-related issues reported to CNBC was the Jacqueline ship, which Blue Origin purchased from Swedish shipping company Stena Line to convert it into a landing platform for its New Glenn rocket booster. Jacqueline has suffered several setbacks during retrofitting, said one person, and the project is 21% over budget, according to another – who noted that the delay was related to the Covid pandemic.

The company’s vice president of finance Lisa Graham is leaving next week, two people familiar with said.

Blue Origin’s human resources team used to conduct exit interviews for anyone leaving the company. But HR representatives have largely stopped doing so, two people said, some still leaving exit interviews with “people drowning in.”

push back to the office

The central sticking point, and the reason cited by many who recently left, was Smith’s strong push for all Blue Origin employees to return to office this year. Called “Blue Back Together,” the plan came despite hundreds of employees signing a petition calling for at least one hybrid work model to be implemented – a petition that people familiar with said was never accepted by Smith. it was done.

Instead, Smith spent millions of dollars this year renting out expansion office space near the company’s headquarters, sources told CNBC. These sources said he wanted every single employee to be back in the office by September, with no flexibility for the hybrid model – and planned to effectively ban remote work.

Additionally, as part of Smith’s rush to return employees to the office, people familiar with the matter said the CEO launched a COVID vaccination disclosure program in May via “green dots” on company badges. But Smith’s initiative was based on a good faith belief, many said. Employees just had to ask the office receptionist to add circular green stickers to their badges, which did not require any proof of vaccination. Blue Origin later added a paper sheet for employees to sign before getting the green dot, but still no one had to show the vaccine card or indicate when they received it.

While Bezos in the spring was supportive of bringing employees back, an acquaintance said he later dismissed Smith’s push. In addition to a limited number of essential staff, Blue Origin employees continue to work entirely remotely, two sources said, with a full return to the office now delayed to January.

Smith: ‘There’s nothing you guys can teach me’

Bezos hired Smith to be his right-hand man and make day-to-day decisions, taking on the same role of SpaceX’s chairman and COO Gwynne Shotwell under Musk.

Smith has grown rapidly in Blue Origin’s workforce, from more than 1,000 employees when he joined in 2017. But Smith’s time has seen the company struggle to deliver several key programs, which Blue Origin’s chief operating officer left at the end of last year.

The company’s biggest win this year was New Shepard’s first crewed launch, which was a smooth success. But the milestone for the suborbital rocket came after years of delay, with Blue Origin previously saying New Shepard would launch to people by the end of 2017.

New Glenn is a reusable, next-generation rocket that Blue Origin is developing for Orbital Launch, a market dominated by SpaceX and United Launch Alliance. The rocket was originally slated for its inaugural flight in 2020, but was delayed until at least the fourth quarter of 2022. A person familiar with the progress of the rocket’s development said the target is extremely optimistic, with New Glenn’s inaugural launch slated for 2024 or later.

The BE-4, the centerpiece of Blue Origin’s rocket engines, was to be ready by 2017, but a myriad of development issues mean the company has yet to deliver its first flight-ready engine. In particular, the BE-4 program is significant beyond the company, as ULA signed on to use the engines to power its Vulcan rockets, choosing Blue Origin over Aerojet Rocketdyne as its supplier – ULA has long Has been serving as a reliable launch provider for the Pentagon since time immemorial. Valuable and classified spacecraft.

The ULA contract specified that Blue Origin would deliver the first two flight-ready BE-4 engines by April 2020, a person familiar with the deal told CNBC. But, in early 2019, the company’s engine team submitted an update to Smith and every component of the BE-4 engine had a technical problem, the person said. The company has yet to deliver those flight-ready BE-4 engines to ULA.

Blue Origin is also locked in a fierce court battle, after losing the award of NASA’s multi-billion dollar lunar lander contract to SpaceX.

The pressure of delays and contract losses may explain why some consider Smith’s leadership style to be gruesome or heavy-handed. But a person close to the CEO stressed the disparity between the expectations of Smith and the Washington-based workforce at large—which are often very competitive, and don’t need to relocate to find similar technical, well-paying jobs. it occurs.

The man also highlighted the discontent in the team around Smith. In one meeting, for example, Smith told his team “There’s nothing you guys can teach me that I don’t already know,” according to two people familiar with the discussion.

Another person close to Smith told CNBC that at one point the relationship between the CEO and his senior team had deteriorated so much that Blue Origin hired a leadership consultant to investigate the situation. After hours of face-to-face interviews with Smith’s executive team, the consultant began his response presentation to Smith with this line: “It is the unanimous opinion of your senior leadership team that you are a micromanager.”

Smith responded simply: “You think you’re telling me something I don’t know? I’m very proud of it, and have no intention of changing,” according to two people present at the meeting and a third who Heard about his comment after the fact.

A spokesperson for Blue Origin denied those comments, saying in a statement: “We have checked with the entire leadership team and the leadership advisor you referred to and we can 100% confirm that those statements were never made. “

Although details about Blue Origin’s turnover have not been previously disclosed, there is widespread internal distaste for Smith. This is reflected in the job site Glassdoor, which shows that just 19% of employees accept Smith’s leadership. This is well below approval for other space executives, as Glassdoor shows that 91% of SpaceX employees approve of CEO Elon Musk and 77% approve of United Launch Alliance CEO Tory Bruno.

Bezos, who invested billions in Blue Origin through an Amazon stock sale, has yet to show that he is unhappy with Smith.

For his part, Bezos has started spending more time with his space company, as CNBC reported Monday. Two people familiar with his involvement said Bezos is technically astute, showing a keen understanding of spaceflight and rocketry. However, they also said that there is no chance Bezos himself will decide to run Blue Origin full-time.

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