Facebook has just leased enough new office space in Manhattan to nearly triple its current local work force, including at one of the city’s most iconic buildings, the 107-year-old former main post office complex near Pennsylvania Station.
Apple, which set up its first office in New York a decade ago, is expanding to another building in Manhattan. And Google and Amazon are stitching together corporate campuses in the city more quickly than anywhere else in the world. Amazon paid roughly $1 billion in March for the iconic Lord & Taylor building on Fifth Avenue.
Despite a pandemic that has ravaged New York, hollowed out many of its office buildings and raised fundamental questions about its future, the four companies collectively known as Big Tech are all significantly expanding their footprint in the city, giving it a badly needed vote of confidence.
With fears that the virus could spike again in the colder months, many companies are grappling with how, when and even if office workers will come back to buildings in Manhattan. And the tech giants have not brought their workers back yet, either.
Even so, the giants have not only moved forward with previous growth plans, but have also increased their pace of hiring and office acquisition during the pandemic.
The industry’s embrace of New York City comes despite the tumultuous reception that Amazon received last year when it proposed building a sprawling headquarters in Queens. Amazon abandoned the plans in the face of political and community opposition, but now has acquired more than 2 million square feet of office space for corporate workers, as well as warehouses from Staten Island to Queens to the Bronx.
After Amazon bought the Lord & Taylor building, it announced in August that 2,000 employees would eventually work there, increasing by half its current tech work force of 4,000.
Amazon now has eight office properties in New York, most of which are clustered in Midtown. The company recently expanded outside Manhattan, leasing space on the Brooklyn waterfront for its Amazon Music team.
“We know that talent attracts talent, and we believe that the creative energy of cities like New York will continue to attract diverse professionals from around the world,” said Ardine Williams, Amazon’s vice president of work force development.
Even with Big Tech’s expansion, the city continues to face a fundamental challenge: Most offices have been deserted since March, devastating the local economy and the ecosystem of transit, stores, restaurants and other business that depend on workers. Only about 12 percent of workers have returned to Manhattan offices managed by CBRE, a commercial real estate firm that manages 20 million square feet of office space in the city.
Many people do not want to go back to offices until there is a vaccine. Even after that, there are mounting questions about whether the pandemic has fundamentally tarnished the allure of the office towers of Midtown and Lower Manhattan.
What’s more, a recent uptick in new cases in parts of Brooklyn and Queens has raised fears that a second wave looms and that restrictions on daily life could be reimposed.
Collectively, Amazon, Google, Facebook and Apple have hired more than 2,600 employees in the city so far this year, bringing their total employment to over 22,000 people. Facebook alone has added 1,100 workers to bring its current work force up to 4,000.
Apple, Amazon and Facebook have gobbled up more than 1.6 million square feet of office space since the start of the year, most of which was leased or bought during the pandemic. Before the pandemic, Google added about 1.7 million square feet of office space as part of a corporate campus rising along the Hudson River in Manhattan.
The companies now have enough new office space to hire another 15,000 employees. When those workers will arrive at the new offices remains uncertain; all four companies have allowed their employees to work remotely and some, including Facebook, foresee a future in which up to half its employees work from home.
Executives at the companies said their investments even during one of the city’s darkest periods reflect their belief that the features that set New York apart — its diversity, culture, regional transportation network and numerous colleges and universities — will keep luring people after the pandemic.
To a large extent, the companies are also wagering that current and future employees will be eager to return to shared workplaces that promote spontaneity and collaboration.
“The big takeaway here is that New York will always be a tech hub,” said William Floyd, director of external affairs for Google’s New York offices, which has about 9,000 workers, more than half of whom are engineers.
Google is on target to employ 14,000 people in the city in the coming years, fulfilling a 2018 pledge to double its New York City work force. The company has pieced together a sizable corporate campus in and around the Chelsea neighborhood in Manhattan, including several properties that are under construction.
The tech sector first settled in New York more than two decades ago, a tiny player in the shadows of the city’s traditional powerhouse industries like finance, media, real estate and health care. Google opened its first outpost outside California, a sales office in Manhattan with a lone employee, in 2000.
But in recent years, New York has blossomed into a bona fide tech hub, an East Coast rival to Silicon Valley that has become a second home to tech behemoths but has also given rise to thousands of start-ups.
The larger companies have established a tech corridor on Manhattan’s West Side, stretching from West 34th Street in Midtown south to the World Trade Center area in Lower Manhattan.
The focus of the tech companies in New York has shifted from marketing and sales departments to teams that mirror those in Silicon Valley. They have recruited engineers and developers from local and regional universities and filled some roles with West Coast employees who want to decamp to New York City.
For every Big Tech company in the city, there are numerous smaller but still sizable firms, including Salesforce, LinkedIn, Spotify and ZocDoc. Microsoft, another tech giant, has a modest presence in offices near Times Square.
Before the pandemic, the city’s tech sector employed 150,100 people, and had added a total of 15,700 jobs in 2018 and 2019, according to the New York State comptroller’s office. Most of the new jobs were in fields like software, data processing and internet publishing.
The pace of hiring is expected to keep climbing.
In August, when Facebook grabbed all the office space at the James A. Farley Building near Pennsylvania Station, it cemented Manhattan’s West Side as its East Coast campus.
The company said it leased 730,000 square feet at the old post office in part because of its cavernous layout — a rarity among New York City buildings — which mimics the large open areas at its headquarters in Menlo Park, Calif. When a renovation is completed next year, the building will be filled with engineers.
“The floor plan will allow for multiple teams to be housed on those floors,” said Jamila Reeves, a company spokeswoman, “and we don’t necessarily have to break folks up.”
Around the corner from the Farley Building, Apple signed a lease for 220,000 square feet at 11 Penn Plaza, a 1923 Art Deco tower near Madison Square Garden.
Before the deal, Apple, which has said very little about its plans in the city, had not expanded beyond an office building on Fifth Avenue in the Flatiron neighborhood that it moved into in 2011.
Smaller tech companies have also kept adding to their payrolls right through the outbreak.
MongoDB, a cloud database platform whose headquarters are in Midtown Manhattan, has hired 97 employees since the beginning of the pandemic, bringing its total work force in the city to 551.
The company, whose products are used by Verizon, eBay and Adobe among other companies, has more than 2,100 employees worldwide and is creating a hybrid work model to have employees work remotely some days and in the office on others.
“While there are questions about what the future of work post-Covid will look like, we plan to maintain office spaces in New York,” said Dev Ittycheria, the company’s chief executive. “We believe that being physically present with colleagues in an office can offer important opportunities for in-person interaction, collaboration, and connection that are important for the success of our company.”
One of the company’s newest hires, Farah Wahab, started in August as a product marketing manager after working for five years at tech companies in San Francisco.
Though San Francisco has a far larger tech scene, she said the city felt more insular compared with New York.
“I love S.F. but it can feel a bit like a tech-centric bubble isolated from the real world,’’ Ms. Wahab, 32, said. “Being around different industries and types of people, as well as greater access to the market, was important to me both personally and professionally.”
Kia D. Floyd, Facebook’s head of public policy for the east and Midwest regions, pointed out that the company set up shop in New York shortly before the 2008 great recession, another challenging period of uncertainty in the city.
“People fled the city then and didn’t think it would come back,” Ms. Floyd said. “But the city has grit and resilience and diversity, and it was always going to be inspirational for businesses like ours.”
Help! My Travel Agency Shut Down and I’m Out $2,000
Dear Tripped Up,
Earlier this year, I used STA Travel to book a British Airways flight from Tucson, Ariz., to South Africa, scheduled to depart in March. Then the pandemic hit, one of the flight legs was canceled and I canceled my trip. After some back and forth, STA secured a refund from British Airways. I was told by an STA representative that my airfare — $2,059.36 — would be credited back to my credit card account within 60 days. Two months came and went. Then I learned that STA had gone out of business. Kaitlin
When I first read your email, I was hit with an inkling of hope that your credit card company could rush in and save the day. Still, I set off to learn more about the laws and policies at play, so I did usually do when I start a Tripped Up column: I emailed some industry sources and started a Google Doc to organize my thoughts.
The notes became a rabbit hole, expanding with news coverage of STA’s collapse, a list of potential interview subjects, email addresses for international press offices and lengthy financial documents. From the chicken scratch, one truth emerged: Anyone attempting to recoup funds from an out-of-business company will likely confront uphill battles, tall orders and every other cliché in the book.
“In general, when a company goes into bankruptcy, basically it’s the vultures picking over the bones,” said Ira Rheingold, the executive director of the National Association of Consumer Advocates, a Washington, D.C.-based nonprofit. “The last people who will get a piece of those bones are going to be the unsecured creditors: the consumers.”
Formerly a major travel agency for youth and student trips, STA Travel filed for bankruptcy in August after a crippling flurry of pandemic-related cancellations; it was the first major travel agency to fall because of the pandemic. Although STA’s Instagram account has been dormant for more than two months, the comments live on as a record of unanswered questions and in-limbo refunds: “I have a student that is needing an update on her refund status and there is literally no way to reach anyone,” wrote one user. “I wonder how many people got robbed of their hard-saved holiday money,” lamented another.
From the start, your case felt like a maze of sharp corners and dead ends. First I visited the STA Travel website: shut down. Then I emailed the customer service agent you had corresponded with: bounceback. When I reached out to the press office of Diethelm Keller Group, STA’s former parent company that is based in Switzerland, and I got the following statement back: “As STA Travel Holding AG is in insolvency proceedings, Diethelm Keller Group is not in a position to provide further support or information.”
I contacted the Arizona Attorney General’s office after discovering one address for STA in Arizona — possibly a franchise — but was told by a spokeswoman that all consumer complaints are confidential.
I considered calling British Airways, but decided against it; after all, the airline had already canceled your tickets and refunded your money (to STA). Customers hoping to cancel active reservations might have luck by appealing directly to the travel company in question, but anyone waiting for an in-process refund from an intermediary like STA probably would not.
I also thought about what would happen if you were to file a complaint with the Department of Transportation’s Office of Aviation Consumer Protection, but decided that the particulars of your situation would almost certainly translate into more wasted time. There are simply too many layers of gray areas: Only one of your flight legs was canceled by the airline, you purchased tickets from a third-party seller and your refund had already ostensibly been approved.
Travel insurance wouldn’t have necessarily been a magic bullet, either, said Jennifer Fitzgerald, the co-founder and chief executive of Policygenius, an online insurance marketplace. Even when policies do cover the financial default of a travel supplier, they come with loads of caveats, restrictions and conditions.
“Not every travel insurance policy includes financial default protection, and not every provider will be covered,” said Ms. Fitzgerald. “For example, third-party sellers, like travel agencies, will tend not to qualify as travel suppliers, so travel insurance financial default protection won’t cover them.”
I got about 10 pages into a 90-page bankruptcy document outlining the liquidity ratio of STA’s New Zealand arm before (to use another cliché) going back to square one: the credit card company.
Some credit cards include financial insolvency protection (designed to help cardholders when a travel merchant goes bankrupt) in trip cancellation insurance. Others, including the Chase Sapphire Reserve card you used, exclude financial insolvency protection from insurance, handling it through standard disputes channels instead.
In an emailed statement, a spokeswoman for JPMorgan Chase said, “A cardmember can submit a dispute as a result of merchant financial insolvency, which we review on a case-by-case basis.”
The Fair Credit Billing Act, a federal law enacted to protect consumers from unfair credit billing practices, doesn’t have a specific carve-out for a merchant’s financial insolvency, but it does consider “charges for goods and services you didn’t accept or that weren’t delivered as agreed” one of several types of billing errors that consumers have the right to dispute. And although every credit card dispute hinges on the particulars, this is the easiest, most actionable move for lone consumers battling a company that has all but evaporated.
You might wonder, as I did, whether things are more complicated because you’re an American citizen trying to get a refund from an insolvent Swiss company for a canceled British flight. But so long as the consumer’s account with the credit card issuer (a bank, most likely) is based in the United States, and credit is issued to a United States resident, the transaction is covered by the billing error rules of the F.C.B.A.
To protect your rights under the F.C.B.A. in the Before Times, you would have had 60 days from the statement with the billing error to dispute the charge. But these times are hardly normal. That’s why a representative at JPMorgan Chase — citing “your atypical situation with this merchant” — issued you a full refund.
My quest unearthed other tips: Even if you’re filing a dispute through a credit card’s online channels, be sure to also submit the dispute in writing, via snail-mail, to the address the card issuer specifies for billing errors (a condition of the F.C.B.A.). The Federal Trade Commission has a good sample letter online. If you’re not making headway, file a complaint with the Consumer Financial Protection Bureau, which has jurisdiction over the country’s largest banks.
One final word of advice — and one final cliché — from Mr. Rheingold: “It’s about the squeaky wheel, right? Putting something out on social media: ‘Can you believe what this company did to me?’ Or saying, ‘I’ve been a cardmember for the last 20 years and I’m getting rid of it from now.’ That’s not legal advice — that’s just practical. That’s when you get your money back.”
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Michelle Obama’s ‘Becoming’ Editor Starts Her Own Publishing Firm
Two years ago, at what seemed to be the pinnacle of her 25 years in publishing, Molly Stern’s career came to an abrupt halt.
As publisher of Crown, Ms. Stern had released 2018’s biggest blockbuster — Michelle Obama’s memoir, “Becoming,” which sold more than two million copies in its first two weeks. Less than a month later, Ms. Stern left the company in a shake-up, after Penguin Random House merged the Crown and Random House publishing divisions.
Her departure baffled many in the industry because of Ms. Stern’s track record for spotting both commercial and literary hits. A natural next move would have been to set up shop with her own imprint at a rival publishing house, but as she surveyed the landscape, she decided she wanted to build something from scratch.
“What I really wanted to do was tend to my own obsessions and figure out how to do it independently,” she said in an interview this week. “The opportunity to do something new was just too exciting.”
Ms. Stern is starting a new publishing company, Zando, with an unusual marketing and publicity model. Rather than relying chiefly on bookstores, retailers, advertising and other traditional channels to promote authors, she plans to team up with high-profile individuals, companies and brands, who will act as publishing partners and promote books to their fans and customers.
Zando is in advanced negotiations with several potential partners, Ms. Stern said, though the company was not prepared to name them or announce projects. Zando’s partners will get a cut of the royalties; Ms. Stern declined to provide specific breakdowns.
Launching a new publishing venture in an oversaturated media ecosystem — not to mention during a pandemic and economic crisis — may seem like a risky undertaking. But Ms. Stern has aligned herself with deep-pocketed backers.
This summer, she received a significant start-up investment from Sister, an independent global studio that was founded in 2019 by the media executive Elisabeth Murdoch, the film industry executive Stacey Snider and the producer Jane Featherstone. Ms. Stern, Ms. Murdoch and Ms. Snider will sit on Zando’s board of directors, along with Matthew Lieber, co-founder of the podcasting company Gimlet, and David Benioff, one of the producers of “Game of Thrones.”
Ms. Murdoch said in an interview that she wanted to invest in Ms. Stern’s publishing company because it aligned with Sister’s goal of producing high-quality entertainment from emerging writers. The team behind Sister produced the HBO series “Chernobyl” and the British thriller “Broadchurch.”
“When you have a world of massive consolidation and homogeneity, Molly and Sister have a huge passion for new voices,” Ms. Murdoch, the daughter of the media mogul Rupert Murdoch, said.
With her industry experience, Ms. Stern may also have an advantage when it comes to signing authors. During her tenure at Crown, the company published blockbusters like Ernest Cline’s “Ready Player One,” Gillian Flynn’s “Gone Girl” and Andy Weir’s “The Martian,” as well as breakout works of translation like Han Kang’s “The Vegetarian,” which won the Booker International Prize. At Crown, Ms. Stern helped the actress Sarah Jessica Parker start her own literary fiction imprint, an experience she drew on in creating the business model for Zando.
“That’s an advantage she has from being in the business for as long as she has,” said the literary agent David Kuhn. “There will be authors who have worked with Molly in the past who will be much more open to trying something different.”
By aligning authors with cultural ambassadors of sorts, Zando aims to deploy star power to keep its books from drowning in a sea of online content.
“Discoverability is a real crisis,” Ms. Stern said. At Crown, when she was publishing books by lesser-known authors, the lack of broad support was constantly frustrating, even when authors got positive reviews and retail promotion.
“You felt that you were publishing into a vacuum,” she said. “To find an audience is increasingly complicated.”
Several celebrities and public figures, including Jenna Bush Hager, Emma Watson and Reese Witherspoon, have started book clubs and emerged as literary influencers. Ms. Witherspoon’s endorsements helped turn novels like “Little Fires Everywhere” and “Where the Crawdads Sing” into hits, and she has made her media company, Hello Sunshine, into a book-to-screen factory.
As an independent publishing company, Zando can also experiment with distribution in ways that might be challenging for legacy publishers. Ms. Stern said she would rely on traditional distribution networks to get print copies to bookstores but also plans to experiment with alternative distribution channels such as direct-to-consumer sales. She also plans to make audio a centerpiece of the company’s content; after leaving Crown, she has advised Spotify on how to build its audiobook business.
Zando expects to publish its first books in the fall of 2021. Ms. Stern, who will take on the role of chief executive, initially plans to hire eight staff members and later to grow to a staff of 20. She came up with the name as a nod to the first letters of her sons’ names, Zach and Owen.
Forget Antitrust Laws. To Limit Tech, Some Say a New Regulator Is Needed.
For decades, America’s antitrust laws — originally designed to curb the power of 19th-century corporate giants in railroads, oil and steel — have been hailed as “the Magna Carta of free enterprise” and have proved remarkably durable and adaptable.
But even as the Justice Department filed an antitrust suit against Google on Tuesday for unlawfully maintaining a monopoly in search and search advertising, a growing number of legal experts and economists have started questioning whether traditional antitrust is up to the task of addressing the competitive concerns raised by today’s digital behemoths. Further help, they said, is needed.
Antitrust cases typically proceed at the stately pace of the courts, with trials and appeals that can drag on for years. Those delays, the legal experts and economists said, would give Google, Facebook, Amazon and Apple a free hand to become even more entrenched in the markets they dominate.
A more rapid-response approach is required, they said. One solution: a specialist regulator that would focus on the major tech companies. It would establish and enforce a set of basic rules of conduct, which would include not allowing the companies to favor their own services, exclude competitors or acquire emerging rivals and require them to permit competitors access to their platforms and data on reasonable terms.
The British government has already said it would create a digital markets unit, with calls for a Big Tech regulator to also be introduced in the European Union and in Australia. In the United States, recommendations for a digital markets regulator have also been made in expert reports and in congressional testimony. It could be a separate agency or perhaps a digital division inside the Federal Trade Commission.
Significantly, the leading proponents of this path in the United States are mainstream antitrust experts and economists rather than break-’em-up firebrands. Jason Furman, a professor at Harvard University and chair of the Council of Economic Advisers in the Obama administration, led an advisory group to the British government that recommended the creation of a digital markets unit in 2019.
Breaking up the big tech companies, Mr. Furman said, is a bad idea because that would risk losing some of the consumer benefits these digital utilities undeniably deliver. A regulator is necessary to police digital markets and the behavior of the tech giants, he said.
“I’m a small ‘c’ conservative, and I’m not a fan of regulation generally,” Mr. Furman said. “But it’s needed in this space.”
Regulators that focus on specific sectors of the economy are common in the United States. For financial markets, there is the Securities and Exchange Commission; for airlines, the Federal Aviation Administration; for pharmaceuticals, the Food and Drug Administration; for telecommunications, the Federal Communications Commission; and so on.
There is also precedent for picking out a handful of big companies for special treatment. In banking, the biggest banks with the most customers and loans are classified as “systemically important financial institutions” and subject to more stringent scrutiny.
Several supporters of a new tech regulator were officials in the Obama administration, which was known for being friendly to Silicon Valley. But the advocates said that experience — as well as the conservative, pro-big business drift of court rulings in recent years — left them frustrated with antitrust law as the only way to restrain the growing market power and conduct of the big tech companies.
“The mechanism of antitrust is not working to protect competition,” said Fiona Scott Morton, an official in the Justice Department’s antitrust division in the Obama administration, who is an economist at the Yale University School of Management. “So let’s do something else — use a different tool.”
Ms. Scott Morton led an expert panel on antitrust in a report last year on digital platforms by the Stigler Center at the University of Chicago’s Booth School of Business. The report recommended the creation of a regulatory authority. (Ms. Scott Morton has been a forceful critic of Google, but also a consultant to Apple and Amazon.)
Such a regulatory approach carries the risk of government’s meddling in a fast-moving industry that could hobble innovation, some antitrust experts warned. While antitrust law reacts to alleged anticompetitive behavior and can thus be slow, that shortcoming is preferable to prescriptive government rules and regulations, they said.
“I’m very uncomfortable with the regulatory path, especially if it means things like getting government approval for product changes,” said Herbert Hovenkamp, a professor at the University of Pennsylvania Law School. “The history of regulation shows that it is an innovation killer.”
A. Douglas Melamed, a former general counsel of Intel and a former antitrust official in the Justice Department, shared that concern. But Mr. Melamed, a member of the expert panel for the Stigler Center report, said the tech giants did pose a competition problem.
“I think regulation might make sense if it is narrowly focused, not running the industry,” said Mr. Melamed, who is a professor at Stanford Law School.
The last major antitrust action against a big technology company was the landmark Microsoft case in the 1990s. The case began with a suit filed in 1994 by the Federal Trade Commission and a simultaneous consent decree.
The Justice Department and several states later picked up the pursuit, investigated anew, filed suit and conducted an exhaustive trial. Microsoft was found to have repeatedly violated the nation’s antitrust laws, and the company then reached a settlement with the government, which a federal court approved in 2002.
In the Microsoft case, the antitrust legal process worked, in its way. Yet its impact is still debated. Without the suit and years of scrutiny, some observers said, Microsoft could have throttled the rise of Google.
But others said the technological shift toward the internet and away from the personal computer meant that Microsoft had lost the gatekeeper power it once held. Technology, not antitrust, they insisted, opened the door to competition.
Triumph or not, the Microsoft case was two decades ago. Proponents of a new regulator said antitrust law was ill suited by itself to restraining today’s faster-moving digital giants. In the internet economy, they said, the forces that reinforce and expand the power of a market leader — called network effects — are stronger and more rapid than in the personal computer era.
“Antitrust is not a fully adequate tool to deal with the companies that dominate these markets,” said Gene Kimmelman, who was on the Stigler Center panel and a co-author of a recent report by the Shorenstein Center at Harvard that called for the creation of a “digital platform agency” in America.
Another argument for the regulatory option is that competition concerns now span four companies, not just one. Apple, Amazon, Facebook and Google are in different markets, including search, online advertising, e-commerce and social networks. Bringing separate antitrust cases against them would most likely be beyond the resources of the government.
“When the competition issues are larger than a single firm, regulation might be the better tool to use,” said Andrew I. Gavil, a law professor at Howard University.
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