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First Move with Julia Chatterley
Stock Markets Rebound After Thursday's Tumble; 170,000 Pro-China Accounts Removed For Manipulation; Ben & Jerry's Proposal To End Racial Injustice. Aired 9-10a ET
Aired June 12, 2020 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[09:00:46]
JULIA CHATTERLEY, CNN BUSINESS ANCHOR: Live from New York, I'm Julia Chatterley. This is FIRST MOVE and here is your need to know.
Friday flip: Stock markets rebound after Thursday's tumble.
Twitter's takedown: 170,000 pro-China accounts removed for manipulation.
And peace, love and ice cream. Ben & Jerry's proposal to end racial injustice.
It's Friday. Let's make a move.
Welcome once again to FIRST MOVE. Great to be with you, as always, and as I mentioned there, we're looking at a Friday flip for stock markets after
Thursday's thwack. I'm not sure if that's a real word.
Quick. Take a look at the global picture right now. That's looking a bit more healthy. A healthy bounce in the United States following the worst day
for stocks since mid-March. The Dow actually fell almost seven percent yesterday. The S&P 500 and the NASDAQ were not far behind.
The small caps got hit hardest with the Russell 2000, the most exposed, as a result. Remember, the Russell 2000 here is the market that most
represents those stocks that are domestic focused in the United States. So, no surprise actually that we saw that falling some 7.5 percent.
The trigger here, a reality check over the health risks amid rising hospitalizations. Maybe the fact that we've seen a 40 percent rally from
the lows virtually without pause, too. I think you can take your pick here.
Consolidation, though, when you're seeing rising markets is normal. But renewed talk of additional U.S. stimulus may be helping the mood a little
here today, too.
I want to hone in as well on the Asia session where we saw little spillover effect really from the turmoil elsewhere. Look, they were in the red, but
nowhere near the declines that we saw in the United States. Perhaps the timing and the handling of the virus outbreak is critical, a distinction
point hereto.
Chinese stocks managed to finish flat, and we got news from Singapore, too, overnight suggesting the economy could be near fully reopened by the end of
the month. We keep fingers crossed on that. A stark contrast clearly to what we're seeing here in the United States.
Take a look at the VIX -- Volatility Index -- the fear gauge. It's a gauge of increased levels of concern. It spiked almost 50 percent yesterday. The
big question now, of course, what next? Well, let's get to the drivers and find out.
Brian Levitt joins us now. He is Global Market Strategist at INVESCO. Brian, great to have you with us.
BRIAN LEVITT, GLOBAL MARKET STRATEGIST, INVESCO: Thank you.
CHATTERLEY: What do you make of the pullback that we saw yesterday?
LEVITT: I mean, the market had staged such a furious advance off of the bottom, I think it left all of us a little bit flummoxed at just why it
went up so rapidly. Look, it's not to say that there wasn't a reason for the markets to go up.
Policy was forceful and things were getting a bit better with regards to cases in some of the hardest hit areas and some pickup in mobility and
resumed economic activity, but this was never going to be a light switch. This was never going to happen with a reopening overnight, and so when you
got to the levels that we got, you needed a catalyst to go higher.
Unfortunately, that catalyst was some pickup of cases in select states and that was a catalyst to drive markets lower. It was bound to happen. It's
going to be a volatile period for some time, until we have greater clarity around reopening and resumption of economic activity.
CHATTERLEY: Is the momentum still upwards? Because if I look at the breakdown of what has driven us higher, it was stocks like technology,
healthcare, big box retailers, those that are benefiting most during this painful period.
It's only in the last week and a half to two weeks where we'd seen some of the cyclical stocks like the banks, the airlines, those hardest hit,
actually join, and we saw greater breadth in this rally.
Ordinarily, that would be a good thing. So, how do we circle that square or vice-versa?
LEVITT: Yes, I mean, widening breadth is a good thing so long as you get the positive catalyst and carry through in the real economy.
[09:05:10]
LEVITT: And look, I think that we will ultimately get there. We'll get through this period and a medical breakthrough or scientific breakthrough
will emerge that will unlock some of this value in the yearly cyclical economically sensitive parts of the market. But the problem in the near
term is it's going to be halt and you see what happens with cases in places like Arizona or Texas and that swoops the market out of those parts.
So, from my perspective, I think that there will be some trend in the market. I think we'll be higher a year from now. But I want to continue to
be positioned, to your point, on those true growth companies that can take advantage of what might be a prolonged halting recovery, you know, one that
doesn't just happen overnight, but one that takes a very long time to emerge.
And in that environment, which is likely to be a prolonged slow-growth environment, I want to be exposed to those companies that can continue to
grow in this world.
CHATTERLEY: Yes, it makes total sense. We can continue to track the number of cases of coronavirus, but that's complicated by increased testing and
always has been. What also seemed to catch investors' attention yesterday was that 12 states are seeing increased hospitalizations.
If I compare and contrast that to Treasury Secretary Mnuchin also saying yesterday, look, we can't shut down the U.S. economy again. We know what
the economic consequences are. If the bar for further shutdown going forward is incredibly high, is that comforting, despite the risks?
LEVITT: You know, we do. We have to bat four for four with regards to policy. So, what (INAUDIBLE) --
CHATTERLEY: That's a shame, because I was interested in that answer. Brian, we're struggling where if you can hear me, thank you so much for your
insights there.
We'll answer that question. Paul La Monica comes up later on the show and we'll talk to him about that. He was of course, the Global Market
Strategist at INVESCO there, Brian Levitt.
Let's move on to our next driver, the U.K. economy saw its worst monthly decline on record in April. GDP falling by 20 percent that month alone as
the virus lockdown measures came into full force. Anna Stewart joins me now.
Perhaps, Anna, no surprise when you put an economy into lockdown that you see growth fall. The question is, how quickly and to what extent can you
bring it back and bring jobs back at the same time?
ANNA STEWART, CNN REPORTER: I mean, an extraordinary and terrifying contraction there for April. If you add it to the month before, it means
the U.K. economy shrank by nearly a quarter in just two months. I mean, this is completely unprecedented.
Now, those numbers are of course, backdated. We're looking backwards. Since then, lockdown has slowly eased for some businesses, for some industries,
so I think we can see that this is probably going to be the very bottom of that contraction for the next few months.
However, it is very severe. How does the U.K. recover? This is what economists are questioning. Will we see the V-shaped recovery that the Bank
of England was so hopeful for? Perhaps not. And I think the biggest risk at this stage to any kind of recovery is the risk of mass unemployment, now
about a quarter.
In fact, I think over a quarter of the workforce in the U.K. is on the government's furlough scheme, so their salaries are being propped up by the
government. That will start to taper as of next month, so two and a half weeks' time.
Companies will start to have to pay a small amount towards that furlough scheme. Now, for some businesses, even if they can reopen, what they're
looking at here is well, how can I introduce all of these social distancing measures? Can I still make money like this? Do I need the same level of
staffing? What about customer demand?
For many businesses, they simply will not be able to sustain the staff levels they've had before. So, we could see that unemployment number really
rise much, much higher in the coming months and that is the biggest threat to the recovery and why there are also people who want the government doing
a little bit more to help some sectors -- Julia.
CHATTERLEY: Astonishing, isn't it? A quarter of the U.K. workforce on this scheme now effectively backed by the government. Anna, there is another
risk out there, and that is of course the transition period following Brexit, ends at the end of this year. There are already senior calls to say
look, we're simply going to have to extend the transition period.
Talk me through Brexit risks here -- Anna.
STEWART: Julia, I have just reconnected my IFB, so sorry, I did not hear your question. If you could repeat it.
CHATTERLEY: Oh, can you hear me now though, Anna? It's Friday. We're allowed to have technical issues. No, she can't. Well, we had plans to talk
about Brexit, as you heard my question, but she can't hear me finish. So, we'll have to move on. Wow. All right, let's talk Twitter and hope for the
best on this one.
[09:10:07]
CHATTERLEY: Twitter has deleted more than 170,000 accounts with ties to the Chinese government. The social media giant says the accounts were spreading
misinformation about the Hong Kong protests, coronavirus and recent protests, of course, in the United States.
Beijing meanwhile rejects those claims. Donie O'Sullivan is here with more. Donie, I'll check first of all, can you hear me?
DONIE O'SULLIVAN, CNN BUSINESS REPORTER: I can hear you loud and clear, so we will play this round.
CHATTERLEY: This is very good news. Let's see if I keep you with us. Okay, break this down for me. What proportion of these accounts were core
accounts? What proportion were amplifiers, just amplifying the misinformation message according to Twitter?
O'SULLIVAN: Sure. So, Twitter told us yesterday that they found about 23,000 accounts which were what they call core accounts which are basically
posting the propaganda, posting messages saying, you know, that China had handled COVID-19 in a very responsible way, attacking protesters in Hong
Kong.
A lot of these accounts were tweeting in Chinese languages, but some of them were also tweeting in English. So, you have the core 20,000 accounts,
but then there was a bigger network of 150,000 accounts that were re- tweeting and liking those messages to make those messages appear more popular than they actually were, and of course getting them into more
users' feeds.
And of course, it's worth remembering that Twitter is banned in China, but the government there is seemingly very active users of the service to shape
our perceptions of geopolitical events around the country, but I mean, really when you think about this, 170,000 accounts, and this is just one
takedown that Twitter -- Twitter does multiple of these a year.
But this is how big a business misinformation is online. There are so many governments and other groups around the world that are trying to shape and
influence our thoughts through our social media feeds -- Julia.
CHATTERLEY: It just makes me want to bang my head down on the desk. We knew that there was political interference in the 2016 election. Once again,
we're in an election year and here we are seeing efforts, huge efforts, but still what a momentous challenge this is.
Donie, something that you said there though just caught my attention. Who was the target of this misinformation?
O'SULLIVAN: Yes. So, I mean, misinformation here can have multiple targets, right, so there are people who can still access, of course, Twitter in
China using VPNs and different things like that.
So, it could be China's own citizens, but it could also be the Hong Kong protesters themselves who try and either inflame them or to rile them up
further, and also, it can be folks looking on from Europe and the United States.
It can be to try to shape our perceptions of what is happening in Hong Kong. You know, one thing that we often see with misinformation,
particularly around the ongoing sort of racial protests here in the U.S., is that oftentimes the people that seem to be the target of the
misinformation are not the actual target.
So, what we've been seeing here in the U.S. for example is that far right activists, actually, white nationalists have been setting up fake Antifa
profiles promising violence, calling for violence on U.S. streets.
Of course, people who are on the right, Donald Trump, for instance, who is talking about how great Antifa threat is, points to a tweet like that, his
supporters will point to a tweet like that to say, see, these guys are violent.
But actually, the impact is not to call for violence from the Antifa supporters, but more to rile up the other side.
So, it's a complex and a pervasive issue and it's one that, as you mentioned, an election year. It is going to be incredibly challenging for
these companies.
CHATTERLEY: Yes, needed to do more sooner. Donie O'Sullivan, great job explaining that, because it is complicated, but the cross-paths here are
also very important to understand. Thank you for that.
O'SULLIVAN: Thanks, Julia.
CHATTERLEY: All right, here are some of the other stories making headlines around the world. The Governor of Washington State says President Trump
should stay out of the state's business.
The Mayor of Seattle says any invasion of the city would be illegal. The President threatened to use Federal forces to intervene in Seattle's
protests. Demonstrators there have taken over a neighborhood after police temporarily withdrew.
Coronavirus infections are spiking across Latin America, according to Johns Hopkins University, South America and the Caribbean have now recorded more
than 1.5 million cases. Over 800,000 people have been infected in Brazil alone.
Meanwhile, in Colombia, the number of confirmed coronavirus cases is also steadily rising. The pandemic is adding to the misery of many Colombians
who are also struggling with income inequality, unemployment and homelessness.
Stefano Pozzebon reports.
[09:15:12]
(BEGIN VIDEOTAPE)
STEFANO POZZEBON, JOURNALIST (voice-over): Three months ago, Lilybeth Fori had a job and a house, but the pandemic took nearly everything away from
her.
Like almost half of the entire Colombian labor force, Lilybeth worked informally first as a caregiver in private homes and then as a street
vendor.
Lockdown measures against coronavirus meant she has seen no income since March and to make things worse, her house was bulldozed at the beginning of
May. The city says it was unsafe, but now she can't find a home.
She has no job and rental accommodations are sparse during the pandemic. Now she can only look at what remains of her house.
(BEGIN VIDEO CLIP)
LILYBETH FORI, INFORMER WORKER (through translator): Before the virus, we had a life. Now, we don't. We don't know what we are going to eat or what's
going to happen to us.
(END VIDEO CLIP)
POZZEBON (on camera): Colombia may have been spared the worst of the health crisis, but the economy is suffering. Unemployment almost doubled in
Colombian cities since the beginning of the lockdown and without a job, the people that are displaced from these areas are saying that they're facing
life on the streets.
POZZEBON (voice-over): Lilybeth and 60 other people now live in tents, an impromptu settlement just meters away from where their houses used to
stand.
Now the pandemic has only added to the frustration of people like Lilybeth who says she took to the streets in November last year to demand social
change.
It has also increased the disparity between those who can afford the quarantine and work from home and those who cannot. By one estimate, as
many as seven million Colombians could fall back below the poverty line by the end of the year, a level not seen since 2002.
Fabian Marroquin also took part in the protests last year, when he was working as a cook. Now unemployed, his home near Lilybeth also demolished,
he thinks a return to the streets is the only way for things to change for the better.
(BEGIN VIDEO CLIP)
FABIAN SERGIO MARROQUIN, INFORMAL WORKER (through translator): The government slogan is stay at home, but where should I stay if they took
away my home?
(END VIDEO CLIP)
POZZEBON: The Colombian government has so far pledged $74 million to prevent layoffs, but little of those resources are designed to help the
informal economy.
Colombia is now lifting some quarantine measures while still trying to control the virus. It's a thin line between the health crisis and the
economic collapse.
Stefano Pozzebon, CNN, Bogota.
(END VIDEOTAPE)
CHATTERLEY: Yes. Inequality challenges all over the world. All right, still to come, a cold call for action on racism from ice cream brand, Ben &
Jerry's. We speak to the CEO about their mandate for change.
And a leg up from Year Up. The firm that aims to boost minority hiring and help tackle pay inequality. That's next. Stay with us.
(COMMERCIAL BREAK)
[09:20:43]
CHATTERLEY: Welcome back to FIRST MOVE where we're looking like we're headed towards a positive open this morning, retracing some of the near
seven percent losses for the Dow in yesterday's trading session. Just one stock, in fact, in the S&P 500 finished higher yesterday and many of the
travel and leisure stocks that were hit hard yet set to bounce today as well.
These have become some of the favorite names for momentum traders and retail investors betting on a rapid economic comeback. We know that's going
to be challenged.
All right, let's move on, to cut America's racial wealth gap, we need to close the skills gap. That's key. This is what the nonprofit organization
Year Up is doing through training programs for young people of color. It wants to help them move from minimum wage jobs to more rewarding careers in
just one year.
Year Up has partnered with over 250 corporations, including the likes of Amazon, Microsoft and Bank of America. Gerald Chervatian is the founder and
CEO of Year Up. He started his career on Wall Street, but soon discovered that nourishing young talent and underprivileged communities' people was
his calling, and what a great one it is.
Great to have you with us, Gerald. Just in your own words, because explain what the mission is with Year Up.
GERALD CHERVATIAN, FOUNDER AND CEO, YEAR UP: Sure. And thank you, Julia, for having me today. So, Year Up is a national nonprofit organization that
works with low income 18 to 24-year-olds and in one year, we enable those young people to move from either no wage or low wage to livable careers
with some of the very best companies in the world.
CHATTERLEY: How do you go about selecting the students, the young people that you bring on to this program? What are you looking for in terms of
attributes?
CHERVATIAN: So, our young adults, we look for motivation. We look for a young person who says I want a hand up. I don't need a handout. I need a
hand up, I need an opportunity.
We look for those students who have an interest in what it is we are teaching, so we work a lot in technology, financial skills, customer
service skills, and someone who says I want to work in a great organization like a Salesforce, a LinkedIn, a Bank of America, and wants to build that
career path, and we're able to look that young person in the eye and say if you work hard for one year, you are going to achieve that job, which on
average for our graduates is about $42,000.00 per year.
CHATTERLEY: Wow. I mean, this is incredible. So, this is not going into some minimum wage or even less in certain cases role. This is a higher
paying start to a career and I think this is an important distinction to what you're trying to provide here -- what you are providing.
CHERVATIAN: Absolutely. And many of those roles, if you think of middle skills in large corporations, it's been very hard for folks who don't have
the access, who don't have the network, who perhaps may not have had the role modelling to see how do I connect? What are the attitude and
behavioral and communication skills needed to perform and excel in those environments?
So, we make sure those young people learn not only things that are marketable like technology, but also the professional skills that are
critical to not only get that job, but to advance in your career at our leading companies across the world.
CHATTERLEY: It's really phenomenal. Talk to me about what steps some of these corporations can take? Because I certainly hear from leadership that
finding talent, finding these individuals in order to try and support minorities and ethnic mix in your workforce, the diversity in your
workforce is a huge challenge.
What are some of the easy criteria changes that perhaps these companies can make that will allow them to access more people, more talent, let's be
clear, from these kinds of communities?
CHERVATIAN: Absolutely, and let's just start, this is good for business and it's good for our community. One of the things businesses can do right away
is to check their four-year degree requirements. So many companies reflexively put the requirement for a four-year degree on just about every
job that they post. And the reality is that a lot of those jobs do not require a four-year degree.
But when you say four-year degree required, you're excluding from the start 86 percent of Latinos and 79 percent of African Americans.
[09:25:30]
CHERVATIAN: The first thing I would do if I was a CEO is call up your HR Director and say where do we have those requirements for a four-year
degree? Why do we have them? And have we looked carefully as whether we truly need to have those for all of the jobs that we'll be hiring for?
That's step one.
Step two is to have very deliberate practices to find and hire talent from pre-baccalaureate places, right, whether our community college system to
some of our community based organizations, but companies have to operationalize pre-baccalaureate hiring just like they've operationalized
campus recruiting.
So, you've got to build that muscle for organizations, and I'll tell you, Julia, it's not that the talent is not there. For many years, Corporate
America has fished in one pond where there are frankly fewer fish and the price is going up.
And there's a whole another pond with incredibly talented, millions of young adults who are hungry, motivated, who want to work hard and they just
need that opportunity and that hand up in order to gain a foothold in a livable wage career that they can take care of themselves and their
families.
CHATTERLEY: It is so important, just a small step. Remove that four-year degree requirement, expand that fishing pond or that pool, as you are
describing. Incredibly dramatically.
Very quickly, because I have around 30 seconds left. What proportion of the students that undergo this Year Up training actually stay on with the
companies that they work for and become an employee? How can we judge the metrics here?
CHERVATIAN: Sure. So, 90 percent of our graduates on average have a successful outcome, which is fantastic, and we know our young adults on
average stay between two and four times longer in the roles they're placed in than alternative sources of talent.
So, our students not only come in and perform, but they are loyal, they are hardworking, they're not entitled and they want to build a career with
these organizations.
We just need our CEOs to step up at this time in our country's history and provide opportunity for those young adults.
CHATTERLEY: Yes, the time is nigh. What a great system. Well done. Founder and CEO of Year Up. Gerald Chertavian, sir, stay safe and stay in touch.
We'll continue to talk about your progress.
CHERVATIAN: Julia, thanks so much for having me. I wish you a good day. Be well.
CHATTERLEY: Thank you. You, too. All right, the market opens next. We're back after this. Stay with us.
(COMMERCIAL BREAK)
[09:31:07]
CHATTERLEY: Welcome back to FIRST MOVE. U.S. stocks are up and running this Friday as we begin winding down what has been a pretty volatile week for
the markets.
Let's be clear, as expected, we do see stocks in the green, that's 2.7 percent higher for the Dow. Remember, compare and contrast with the seven
percent near losses that we saw on yesterday. We do see the Dow and S&P on target to close higher, in fact, for the first time since Monday, if we can
hold onto these gains.
Financial stocks are on the rise after double digit losses for some of the big names yesterday. Banks fell after the Federal Reserve signaled that
interest rates won't rise until 2023 at the earliest. Low rates, of course, pressure bank profits and there was also a warning about just simply how
long the recovery will take. That's not good news for credit of course in the system, things like loans, for houses and credit card payments.
Hopes for further U.S. stimulus, though, may be lending some support here, too. Treasury Secretary Steve Mnuchin says the White House is considering
sending a second round of emergency checks to Americans.
Paul La Monica is here with more on the market reaction. Paul, ordinarily stock markets never go in one direction for the degree and the length of
time that we've seen, a 42 percent rise, some pullback was expected and they were discussing this earlier this week.
PAUL LA MONICA, CNN BUSINESS REPORTER: Exactly. We seem to have gotten it all in one day. I mean, yesterday did surprise me that we had so many
people that seemingly woke up and were of the mindset that, oh, wait a minute, there might be a second wave of COVID-19 and the Fed is going to
keep rates near zero for several years, neither of those would have been or should have been surprises to the markets, but I think many investors had
been just blissfully ignoring some of the risks that are still out there.
And now, today, it's risk back on. You mentioned the banks, Julia, but I think what we're also seeing is the reopening of America trade coming back
into play. You look at airlines like United and Delta. They're surging this morning. Carnival Cruises, back up, I think double digit gains at the open.
So, these are the types of stocks that had been surging as people were hoping the normalcy would return to America, and that trade is back again
today.
CHATTERLEY: Well, I'm going to throw at you a question that I tried to ask Brian Levitt at the beginning of the show and we had some technical issues
and I mentioned the fact that Steven Mnuchin, Treasury Secretary had said, look, we can't shut down the Us economy again. The bar for doing what we've
been through again is incredibly high here.
Do you think investors also drawing perhaps some comfort from that as well, the economic risks here are too great to shut down once again?
LA MONICA: It's possible. I think that clearly investors don't want to see the U.S. economy grinding to a halt again and people sheltering in place
and self-quarantining to the extent that we had in March and early April.
But that being said, if we have a second wave and that leads to a large number of people that are hospitalized, and worse, passing away from COVID-
19 related symptoms, then I think we may have self-quarantining becoming a self-fulfilling prophecy.
Consumers aren't going to rush back to go see movies in a theatre, even if there is social distancing, if all of a sudden there are lots of headlines
again about a second wave and people needing to be concerned about COVID-19 because we know that it's a highly contagious disease.
And even if you take precautions like wearing a mask, you're putting yourself at risk going back out into the open if all of a sudden there is a
high prevalence of cases once again.
Hopefully, we don't get there, but I think that is the risk.
[09:35:08]
CHATTERLEY: Yes. And this is the key -- that bar for shutting down again may be really high, but the science and the virus itself may take that
decision away from you and make it a necessity. That's one of the big risks here.
LA MONICA: Yes, people may shut down themselves, even if they're not told to by Federal and state governments.
CHATTERLEY: Precisely. Paul La Monica, thank you so much for that.
Now, onto another one of our top stories. A growing number of Silicon Valley firms say they'll donate to groups working for racial justice
following the death of George Floyd.
The corporate workplace platform Slack is among them. The CEO, Stewart Butterfield and his partner, Jen Rubio, the co-founder of Away are giving
at least $700,000.00 to Black Lives Matter and to other organizations.
Joining us now is Slack CEO, Stewart Butterfield. Stewart, always great to have you on the show. This is not a new issue. Why did it take so long for
people, particularly big corporates to react in the way that many have here?
STEWART BUTTERFIELD, CEO, SLACK: It's a great question and it's hard to deny that the images that we all saw on social media and CNN and elsewhere
over the last couple of weeks really opened people's eyes.
I mean, I think a lot of people have been telling us for a long time that this was the reaction, this is the kind of relationship they had with
police and I think, we all saw it.
CHATTERLEY: You know, it's interesting. I had a look on your website and you produce a really comprehensive diversity at Slack paper, statistics.
It's full of charts and it's pretty incredible actually. It is one of the most comprehensive that I've read.
Talk to me about the progress that you're making and what more you want to achieve.
BUTTERFIELD: Well, it's been actually really interesting. So, I don't remember the first year that we published the report, but it's been around
five years and maybe six.
In the early days, the real challenge was attracting underrepresented minorities in tech specifically. So, we're a technology company, but
obviously we employ people in business roles and customer support and elsewhere.
And the challenge for the industry has been finding black engineers, other people of color in engineering. That we've made good progress on. And
obviously, still more to go, but we're bringing up the average a little bit.
And I think that's where our attention had been, and now, what we've found is we're behind on the business side. So, it's a very -- look, everything
is tied together. So, I think the reason that Criminal Justice Reform is part of the conversation, police brutality is part of the conversation,
along with differential rates in pay and hiring, is because they're all connected.
And we've tried to make efforts in a pretty broad array and ultimately, I think the thing that matters most for us and for most technology companies
is, are you able to retain employees? Are you able to hire them? Or is it yet another place at which they'll fall out of the industry?
CHATTERLEY: Yes, but you know, I have to commend you, because you do publish statistics for different -- what your ethnic mix is, for men,
women, different categories as well, at different management categories as well, which I think is something where we need to see full disclosure, we
need to understand what is going on and for businesses and you guys do that.
You also point out in this, and I do think it's very important, an estimated one million U.S. engineering roles will go unfulfilled in 2020. I
know COVID probably has complicated this in many ways, but you are a company that's part of a conversation we were just having with Year Up to
try to bring in people, to do an internship, to bring them over, and you've had some success with that, too. These programs are critical?
BUTERFIELD: Yes, we actually -- we've been working with Year Up for a couple of years. This year, I believe, it was 87.5 percent of our interns
through Year Up were hired.
We also work at kind of the other end of the spectrum with John Legend's Free America, the Kellog Foundation, a group called Last Mile on a program
called Next Chapter, which is creating real engineering jobs, high paying jobs for formerly incarcerated people.
So, obviously, there's a lot of training there. There is an apprenticeship program. There's challenges both in the culture of it, but also in the
regulatory environment.
There's a lot of probably misguided laws, I am not happy to say, misguided laws that prevent people with felony convictions from working in certain
parts of the technology industry or having access to certain kinds of data, so that's been a challenge to work around.
CHATTERLEY: Yes. People have served their time. They have to be allowed to change their lives at the back end. I agree with you.
I have to ask you specifically about the business, because we talked about your message to Microsoft the last time you were on and I did happen to
notice that you described in a recent interview as Microsoft being unhealthily preoccupied with killing Slack.
It was an interview with The Verge and that was described as the perception within your company. Anything you want to sort of add to that or context
that you want to provide? Because it is kind of an ongoing debate in the industry. You're enjoying coming on my show.
[09:40:05]
BUTTERFIELD: It is going to be an ongoing debate. Yes, I mean, I would say it's been several years since they included us in their 10-K filings,
listing us as a competitor. We obviously listed them.
I think, it is pretty unique to be -- especially given the differential in size, when they were 1,200th their size, them putting out a press release
saying that Teams is beating Slack, better than Slack.
I think what we've seen over the last couple of years, you know, for us, we had just a blow-out quarter, obviously, related to what's going on in the
world, but continuing to win in the largest enterprises in the world.
So, Verizon and Amazon companywide were big wins that we announced this last quarter. That follows on huge success in retail and financial services
and healthcare, in the government. We just in fact completed our -- what's called the FedRAMP Moderate Program sponsored by the Veterans Affairs
Department.
CHATTERLEY: So, the message is understand the difference between the two products here and what they're providing? And that's the message to
investors.
BUTTERFIELD: Yes, especially, there's a lot of changes and leaders and executives are having to work through multiple crises and a lot of anxiety
kind of in the background, and at the same time, trying to figure out how to operate and manage their businesses in an all-remote environment, which
is a new challenge for many.
So, I, think what we've seen is just an acceleration down the timeline of digital transformation across the board.
CHATTERLEY: Stewart, great to have you with us. Thank you so much. A lot of great work going on there.
BUTTERFIELD: Thank you for having me.
CHATTERLEY: Stewart Butterfield, thank you for that. All right, up next, Ben & Jerry's recipe for change. The ice cream maker, coming up on tackling
racism.
(COMMERCIAL BREAK)
CHATTERLEY: Peace, love and ice cream. That's Ben & Jerry's motto and the ice cream maker is taking a strong stance to make it a reality for all
Americans. Ben & Jerry's issued one of Corporate America's earliest and most forceful condemnations of George Floyd's death, calling it the result
of inhumane police brutality that is perpetuated by a culture of white supremacy.
[09:45:18]
CHATTERLEY: Joining us now, Matthew McCarthy, the CEO of Ben and Jerry's. Great to have you with us, Matthew.
The founders of Ben & Jerry's have never been afraid of standing up for what they see as right. But you have produced a four-point plan as a
company that you want to see enacted.
The first talks about you want bold action from President Trump to condemn what you view as white supremacy in the United States. But the second thing
that caught my attention, too, the cost paid by black and brown people in America in redress. What do you mean by redress?
MATTHEW MCCARTHY, CEO, BEN AND JERRY'S: Thanks very much for having me. This topic is not new, to your point, for Ben & Jerry's. Back in 2016, we
were on record in supporting Black Lives Matter and I think it flows from the values that Jerry and Ben have built into our business.
And on this point about reparations, I think that that can be a scary topic for a lot of white Americans. I know, when I first heard the term
reparations, I had an immediate reaction, but wait a minute, hold on a second.
But to be blunt, white America needs to get over its trepidations about the damage that has been caused to black America and people of color through
the systems and the structures in our country that are frankly racist, and that may be hard for some people to hear, but the same way that gender
equity is not a problem for women to solve, a white supremacy culture is something that white people have to own, and that includes business people
where so much of the economic engine of our country lies.
We, as business people, have to be part of the solution and not delegate that to government or others.
CHATTERLEY: We have to be able to have the conversation. Do you think, to use your term, white America can get over it? And do businesses have to be
prepared to lose customers through taking a stand if they won't get over it?
MCCARTHY: This moment is an incredibly painful one in our country and it's the killing of George Floyd and many others by white people, this is not
new.
And so, the short answer is white America has to be part of the solution. That's the only way we're going to move forward to actually unlock the
promise that America can be. America is an incredible country. It's a great place, and it needs to be made better.
White people need to lead that, myself included, a white male with a lot of privilege in my life. And the second part of your question is absolutely
yes, business. We run a business at Ben & Jerry's and we sell ice cream and we need to do more at Ben & Jerry's and I think all business leaders make
economic opportunity through their entire system.
White supremacy and structural racism exists everywhere and I think that may be difficult for some people to get their heads around, the bigger part
of the iceberg of racism in America is not the part over the water, it's the part underneath. It's the structures, it's the systems that very often
we as white people, myself included, don't actually understand.
So, doing the root cause analysis within your business and across your business system, all of your partners, all of your suppliers, what kind of
things are actually holding back economic value integration for people of color and specifically black people in America.
CHATTERLEY: You raise such a good point and they're separate, but they are clearly very connected, and that is part of this is about tackling
inequality, raising salaries, better education, making sure that businesses have a better diversity mix because we tend to talk a good game on these
things, but actually we don't see it coming out in the numbers.
For Ben & Jerry's specifically, talk to me about your diversity. What steps do you take to actually put in action in terms of your business and your
suppliers? The message that you're also sending here with bold statements about what's required.
MCCARTHY: Yes, that's a great question, because words are nice, statements are great. Statements don't change the world, actions change the world.
Ben & Jerry's is a very white company. We're from Vermont, which happens to be a white state. We love Vermont and we love the track record that Ben &
Jerry's and our teammates have created.
And it is also true that we have to ask ourselves, why are we such a white company? Why don't we have nor franchisees in our scoop shops who are
people of color, minority and black? And so, over the past couple of years, we've actually put specific actions in place, a specific work stream with
KPIs around it to build that education internally.
We brought in outside experts to help coach us, to help guide us on understanding what might systemic racism look like within our business, and
that's training for individuals, education for individual and specific workshops around tackling structural racism within our business.
[09:50:07]
MCCARTHY: And I think also, we've got a huge opportunity, again through our business system, all our farm workers, our farmers, our tremendous
employees that work in manufacturing that are working so hard to keep up the demand for ice cream, really looking deeply at all of those things.
It starts at home. It starts within our business. So while we may make statements, we've got a very specific program in place to actually address
the root causes and to understand it more deeply. We've got a long way to go, Julia. I'll never brag.
We think of ourselves as an aspiring social justice company and we've got a long way to go and I want to be clear about that, because I think other
business folks need to embrace the areas that are not right within their businesses as a step to making the right choices.
CHATTERLEY: Yes, we all have as workers, as consumers, as friends, as colleagues, we all have to continue to have this conversation and get
educated. Matthew McCarthy, great to have you with us, the Ceo of Ben & Jerry's.
MCCARTHY: Thank you very much.
CHATTERLEY: I'll have to say, I love Phish Food. Phish Food is the best. Thank you. All right, still to come, the big unveil, Sony lifts the curtain
virtually on its new Playstation, but some mysteries still remain. That's next.
(COMMERCIAL BREAK)
CHATTERLEY: A treat for gaming fans now as Sony has unveiled the latest version of its highly successful console, Playstation 5. We finally know
what it looks like and what games will be available to play, but the big questions of when it comes and how much it costs remain unanswered.
Clare Sebastian joins us now. Very space age, the image there, Clare. What do we know?
CLARE SEBASTIAN, CNN BUSINESS CORRESPONDENT: Well, Julia, as you say, this was a huge moment for the gaming community. It's been a seven-year period
since the release of the Playstation 4 and Playstation has dominated the last cycle.
So, this was a really big deal, especially in the absence of big gaming events like E-3 because of the pandemic. So, as you say, this was the first
time we saw the actual console, what it looks like. It's pretty spacey. It is pretty unusual.
There are, as well, two versions. There's a digital only version that doesn't have a disc drive. This is pretty new. Could this spell the sort of
gradual end of stores that sell physical games and even online stores like Amazon and Walmart that make money off these things? That is the big
question going forward.
Of course, games were the biggest deal for people who were looking to buy this device. There were some new exclusives that were announced for the
Playstation, the Spider-Man sequel. Spider-Man, Mike Morales, that's sort of a big deal. Spider-Man that Marvel franchise is basically the best-
selling Playstation game of all time. So, no surprises there, but they wanted the sequel.
There's also an enhanced version of Grand Theft 5. There's a new game called Horizon: Forbidden West, which is a sequel to Horizon Zero: Dawn.
As you say though, still a lot of mystery surrounding the price and that really is something to watch, especially since the Playstation 5 is set to
launch sometime in the fall, sometime before the holidays and will go head- to-head with the new Xbox, the Xbox series X.
[09:55:11]
SEBASTIAN: I think the big question, given that Sony is not doing great in terms of cash flow at the moment, they've been pummeled by the pandemic,
their other units, will they try to subsidize these units to go up against Microsoft's Xbox? Microsoft is a much richer company, or will they charge a
little more to protect their bottom line?
CHATTERLEY: Yes, it's going to be interesting, isn't it? There are all sorts of dummy listings and fake suggestions of what it might cost. I think
one of those was 599 pounds, sterling, but I think that could be fake news. So it was discredited on social media as well.
My favorite comparison of what this console actually looks like, though, goes to "Lord of the Rings." I don't know whether you saw one as well,
Clare, there were comparisons of duck beaks and sandwiches. I think we've got the image.
My personal favorite. Oh, that wasn't my personal favorite. How distressing? Clare, is that yours or is that rogue?
SEBASTIAN: A few, Julia. The memes have been coming thick and fast. There's been the helmets from the guardians, from destiny, as you say the Tower of
Mordor from "Lord of the Rings." There is some with googley eyes, I think that might be "Toy Story" looking like it was going to eat the console.
SEBASTIAN: All par for fun. But we have to wrap up the show, I am being told off. Clare, we have to go. Great to talk to you, as always. Happy
Friday.
That's it for the show. I'm Julia Chatterley. Stay safe this weekend. We'll be back Monday.
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[10:00:00]
END
