Toys ‘R’ Us Inc. told employees Wednesday the struggling big-box retailer will sell or close all its U.S. stores, a collapse that threatens up to 33,000 American jobs in the coming months.
Outside the U.S., the chain has another roughly 800 stores. Altogether, court papers show Toys “R” Us has roughly 1,600 stores globally, with approximately 60,000 employees. That number reaches more than 100,000 during peak holiday season.
This place that I think almost everyone has good memories of was driven to waste by vultures who burdened it with debt. They bought Toys ‘r’ Us with loaned cash and put that debt onto the company after the purchase. I didn’t even know you could do that until I read about it last year, but this story from Marielle Segarra explains it best:
And to really get what happened with Toys R Us, you need to understand how these private equity purchases work. They rely on something called a leveraged buyout.
“Leverage just means you’re using lots of debt,” said Eileen Appelbaum, co-director of the Center for Economic and Policy Research.
If a private equity firm wants to buy a company, it’ll put up a small portion of the money. Then it’ll go to the bank and borrow the rest.
The key? “They put the debt on the company they buy,” Appelbaum said.
That’s what they did to Toys “R” Us in 2004. Three businesses bought the company, loaded it up with debt, the workers there have been paying it off ever since. Jeff Spross:
Whatever magic Bain, KKR, and Vornado were supposed to work never materialized. From the purchase in 2004 through 2016, the company’s sales never rose much above $11 billion. They actually fell from $13.5 billion in 2013 back to $11.5 billion in 2017.
On its own, that shouldn’t have been catastrophic. The problem was the massive financial albatross the leveraged buyout left around Toys ‘R’ Us’ neck. Just before the buyout, the company had $2.2 billion in cash and cash-equivalents. By 2017, its stockpile had shriveled to $301 million, even as its debt burden ballooned from $2.3 billion to $5.2 billion. Meanwhile, Toys ‘R’ Us was paying $425 million to $517 million in interest every year.
The employees will probably lose their jobs, the toy makers might not have a good place to get toys in front of people anymore and could go out of business and that could end up being a lot more people losing their jobs for no good reason, just because the vultures swooped in to get a turnaround that wasn’t achievable while paying off the debt.
The CEO, David Brandon, makes bank anyway. JC Reindl:
Brandon enjoyed a total $11.25 million CEO compensation package in 2017, a year in which Toys R Us filed for Chapter 11 bankruptcy amid more than $5 billion in debt. That pay package included Brandon’s $2.8 million retention bonus, paid five days before the retailer’s Sept. 19 bankruptcy filing, to help with continuity through the process.
I’ve got a toy suggestion, it’s not my idea, but I think that Brandon and the executive teams at Bain and the others might want to try it out. Could save any future company they want to work with.
When I worship at the unholy altar of Crunch, everything outside of the work fades away. By design, my world is reduced to where I sleep and where I work. Every day must be fast, focused, and above all else, homogenized. Give myself too much downtime, too much room to think, and I start asking questions, like “Why am I doing this to myself?” So, I lose myself in the routine. When every day is a rehash of what has been, and a preview of what will be, they blend into one another. This creates an out-of-body effect, not unlike highway hypnosis. Soon, who I am becomes an abstract concept—a loose collection of character flaws and neurotic tendencies. Only then can my body become the vessel through which an impossible amount of work will be accomplished in a short amount of time.
I love it, except for when I hate it, but I can’t hate it if I never stop. Even when I’m not crunching, I work too much. I’ve edited scripts in ICU rooms, responded to emails while begging lovers not to walk out the door, sent brainstorming lists during the birth of my child. I held my grandfather’s hand while he passed away, then went into his office and wrote text for mission descriptions. None of this was expected of me, and no one would have dared to ask. I did all these things for me. Work brings order to my world. When things get tough, I slide down into my job and disappear. I let my health, relationships, and responsibilities fall to the wayside. When I finally come up for air, there’s a smoking crater where my life used to be. Instead of picking up the pieces to start again, I slip back down into the thick of it. This is how I cope.
That isn’t how anyone should live. Although the author says that it wasn’t expected of them, many of the situations they have described here are the terrible reality of what people working on games do in response to a spoken or unspoken expectation from management.
There are solutions for the majority of people who work (in games, or elsewhere) and are exploited. Unionization would let employees collectively bargain and achieve better work schedules or better compensation when they must work overtime.
Many of these businesses would almost instantly start managing games projects more efficiently with less overtime if employees were compensated properly for this kind of work and had collective bargaining instead of attempting to individually negotiate their contracts.
Walt Williams might love crunch, but any company that forces it on their employees as a regular matter should be punished for destroying the lives of the workers and their families.
At the end of the day, no matter how much an individual loves it, crunch is not about individuals themselves. Crunch is a systemic, top-down solution to the problem of extracting the most labor from game developers; it is a strategy that is implemented on workers, and it is performed widely in most sectors of the industry. One developer’s complicated relationship with crunch is a blip on the constantly-screaming radar of worker exploitation that the practice enables as part of the normal operation of the game industry. It is not an exception in one person’s life, it is the norm.
The trouble with the internet, Mr. Williams says, is that it rewards extremes. Say you’re driving down the road and see a car crash. Of course you look. Everyone looks. The internet interprets behavior like this to mean everyone is asking for car crashes, so it tries to supply them.
His goal is to break this pattern. “If I learn that every time I drive down this road I’m going to see more and more car crashes,” he says, “I’m going to take a different road.”
For five years, Mr. Williams has been refining a communications platform called Medium. Its ambition: define a new model for media in a world struggling under the weight of fake or worthless content. Medium is supposed to be social and collaborative without rewarding the smash-ups. It is supposed to be a force for good.
Medium feels to me like it isn’t as popular as Twitter, but it is a thing that I suspect most people reading this would have read a few articles on.
The article talks about the business model of Medium, how it exists as a platform for writing. I think it misses the real problem with the site, the reason why Medium exists is to profit off of the work of writers. Not that Evan Williams is a bad person — he tried to create a space for good writing in Medium — the real problem with Medium is that it is yet another business that exists as a parasite on a writer’s work without providing them with a living wage or an identity.
The Times article goes on to talk with one writer who made some money on the site. She received $50 per article, when they were paid, and went on to write about 100 in the same year. Not all of those were paid, and $50 isn’t bad at all for a new writer, but even if she had been paid for every article $5000 a year isn’t going to pay the rent.
Whether the business model is correct or not, I read many articles on Medium, I link to very few, and I can’t remember who the authors are of most of the articles I read on the site. Their identity is subsumed into Medium and they no-longer own their writing when it is read on Medium.
The only opportunities for an author to express themselves on the page are their byline, and any auto-biographical text that they write in their bio underneath the byline.
In that article by Jose Moran, it is an article exclusively about that author’s work experience at Tesla. We might remember Jose a bit more than anyone else because he works for Tesla, which is an important company in the electric car field even if I don’t like the way they treat their employees.
Here’s how his byline block appears:
Here’s the banner at the bottom of the page when you’re not logged into Medium:
Here’s how the author’s byline block is on a page hosted by Medium:
The bio gets cut-off at the top of the page, but there’s a larger version at the bottom with the full text.
Here’s the banner on that hosted site:
What are you signing up for? Medium. Not ThinkProgress, not Jose Moran. You might incidentally get updates from ThinkProgress or Jose after signing up, but Medium-the-business doesn’t give a crap if you do, so long as you keep using Medium.
In both cases the author loses control over their byline as well. Did Joe Romm want to display just part of his byline at the top of the page? We’ll never know, because Medium decided for him.
Does Jose Moran want you to sign up for more updates from him in case he posts an update where Elon grows some balls and lets his employee’s Unionize? Medium decided that no, what you want to do is sign up for Medium.
The only person that has an author’s best interests in mind is that author.
When an author has their own site, they are totally free to express themselves with more than just a byline. Nuclear Monster is to my taste as a modification of the free software WordPress. At the top of the page, that’s a logo I made with the feedback of friends. I picked out the colors of the site, and what code I wanted to use. I decided what the site’s focus should be. Medium pages are identical, generic and bland, because they express the identity of that site instead of the identity of that author.
Those bylines above are actually an improvement over the original Medium. Back in 2013 the author’s byline looked like this:
It is possible that the 2013 byline looked a little better, I have cribbed it from the archive.org version which sometimes isn’t able to preserve the entire detail of an archived page. However, it matches my memory of the site. No author photo or bio.
When you follow an author who has their own site by subscribing to their RSS feed, or on Facebook, or Twitter, you’re going to get to their site as the destination to read their work.
That author gets to decide if they’re going to link off-site at the bottom of their article page. I don’t personally like those kinds of advertisements, so I just have a rotating group of related articles from Nuclear Monster, but at least I have a choice and could decide if I wanted them. Jose Moran has no option after choosing to use Medium to host his writing. There are links to whatever articles the Medium algorithm picked.
As a writer, I hope that Medium fails, because it can’t exist as a functioning business without exploiting authors who need to establish their own identity in order to survive. I want to see more writers own their own websites or choose to work collectively with others instead of seeing their work stripped of identity and authorial ownership to another business intent on exploiting them.
The problem with San Francisco area startups is that they are all car crashes intent on smashing into as many people as possible before the money dries up and they leave without insurance to clean up the mess they left behind.
When Medium fails and is sold to Verizon, it will leave writers bloodied and bruised in its wake who haven’t established their own identity and they may be so frustrated with the experience that they give up on writing entirely.
Ashe Dryden with an older article on the subject of who can give their development time to free or open source software, and who benefits from it:
I don’t know that we can easily measure how much labor actually goes into creating the software that we use every day. Software that we not only benefit from by saving us time, but also makes us quite a lot of money. We work at startups, consultancies, and large enterprises that pay our salaries thanks to the financial benefit of OSS and the mostly unpaid labor of those contributing to it.
People who are contributing their unpaid and underpaid labor are investing their time into companies that are profiting greatly and giving little back in terms of financial support.
We’ve somehow been culturally talked into accepting this arrangement, not realizing how businesses are using it to further extract value from us. Businesses are choosing candidates based on their open source contributions, knowing that they are getting more value for less money out of them. These are candidates that will continue to work on things in their free time because it’s something they care about and are passionate about. This is akin to not paying someone for overtime.
Open source originally broke us free from the shackles of proprietary software which forced us to “pay to play” and gave us little in the way of choices for customization. Without realizing it, we’ve ended up in a similar scenario where we are now paying for the development of software that large companies financially benefit from with little cost to them.
We are being judged on how much we contribute to the bottom lines of companies we don’t work for and what’s worse, we are policing this amongst each other as well.
I’ve spent the past 17 years helping free and open source projects flourish as best I can, it’s not a profitable experience and it’ll tax whatever passion you have for the project you’re working on. While some things are worth doing for reasons other than money, and it has helped me in getting some work, I’m not sure I’d recommend it to anyone at this point, and demanding it of people who are applying for work is ridiculous.
There is one problem I have with the article, I see this paragraph and instantly know what some unprincipled managers would want to do:
As part of the interview, have one of your developers who is familiar with the project and is a good teacher pair with the candidate on an actual issue. See how they reason through problems, become familiar with new codebases, and what questions they ask.
“My team is having a problem, lets ‘interview’ some developers and get them to solve the problem for us.”
I have always hated when interviewers demand “homework” or in-person work that solves their actual problems today. That’s why a company hires someone, to solve business problems.
One way to work around this would be to have a set of free software projects, that don’t benefit the company, for the interviewing developer to work on. Pick a few current issues for those projects, let the developer decide which one to work on. Work on those together.
I was then told that I had to make a choice: (i) I could either go and find another team and then never have to interact with this man again, or (ii) I could stay on the team, but I would have to understand that he would most likely give me a poor performance review when review time came around, and there was nothing they could do about that. I remarked that this didn’t seem like much of a choice, and that I wanted to stay on the team because I had significant expertise in the exact project that the team was struggling to complete (it was genuinely in the company’s best interest to have me on that team), but they told me the same thing again and again. One HR rep even explicitly told me that it wouldn’t be retaliation if I received a negative review later because I had been “given an option”. I tried to escalate the situation but got nowhere with either HR or with my own management chain (who continued to insist that they had given him a stern-talking to and didn’t want to ruin his career over his “first offense”).
Don’t worry, you weren’t there and nothing anyone ever reported has happened:
Myself and a few of the women who had reported him in the past decided to all schedule meetings with HR to insist that something be done. In my meeting, the rep I spoke with told me that he had never been reported before, he had only ever committed one offense (in his chats with me), and that none of the other women who they met with had anything bad to say about him, so no further action could or would be taken. It was such a blatant lie that there was really nothing I could do. There was nothing any of us could do. We all gave up on Uber HR and our managers after that. Eventually he “left” the company. I don’t know what he did that finally convinced them to fire him.
This kind of harassment happens at every company in SF and the valley. The men are allowed to threaten and cajole women until the women either give in or get fed up and leave because human resources refuses to do anything.