Newsletter: California Inc.: For some Apple contractors, it’s survival of the fittest

Not far from Apple's Cupertino, Calif., headquarters are spartan offices for contract workers that share little in common with the main campus.
(Ken Wolter / TNS)

Welcome to California Inc., the weekly newsletter of the L.A. Times Business Section.

I’m Business columnist David Lazarus, and here’s a rundown of upcoming stories this week and the highlights of last week.

Wall Street closed Friday on a high note amid renewed optimism about a trade deal with China. But this followed news that retail sales had slumped in December amid a disappointing holiday shopping season. The Commerce Department said December retail sales posted their biggest drop since September 2009 — an ominous sign for the economy.



Executive time: Financial markets are closed Monday for Presidents’ Day. The New York Stock Exchange and the Nasdaq will resume normal trading hours on Tuesday.

Labor market: Weekly jobless claims will be released Thursday. The number of Americans applying for unemployment benefits rose in the week ended Feb. 8, but the level is still low enough to show most workers enjoy job security.

Home sales: The housing market takes center stage as the latest stats on existing home sales come out Thursday. In December, existing home sales declined 6.4% from a month earlier, according to the National Assn. of Realtors.

Popcorn time: Looking for something to do with your kids? “How to Train Your Dragon: The Hidden World” opens Friday. Also consider “Fighting With My Family,” which is about professional wrestling but still looks pretty good.



Monday’s Business section visits the other Apple headquarters in Silicon Valley, the one where contractors, not full-time employees, labor on the company’s behalf. Apple says it requires contracting firms to treat workers with “dignity and respect.” But some former workers say the “black site” is woefully short on amenities and fosters a culture of survival of the fittest.


Here are some of the other stories that ran in the Times Business section in recent days that we’re continuing to follow:


Broken promise: Amazon abruptly announced it was abandoning Long Island City as a second-headquarters site amid outcry over the $3-billion incentive package it was to receive — despite the retailer’s promise to create 25,000 jobs in the New York neighborhood. The decision underscored the heightening skepticism surrounding the practice of governments showering companies with perks to gain uncertain long-term economic benefits.

In the shadows: For years, talent manager Michael Sanchez operated on the periphery of Hollywood with a clutch of obscure clients. Now, he has emerged as the possible source of graphic photos and text messages shared between his sister, Lauren Sanchez, and Amazon founder Jeff Bezos that were obtained by the National Enquirer — raising questions about the publication’s motives and news-gathering methods.

Billionaire gaff: Los Angeles financier Thomas J. Barrack Jr., a close ally of President Trump, apologized for saying it was a mistake to criticize the murder of Jamal Khashoggi, the journalist killed at a Saudi Arabian consulate. The founder of Colony Capital said at a Abu Dhabi conference that “the atrocities in America are equal or worse to the atrocities in Saudi Arabia.” He backtracked the next day.

Record violation: In the largest wage-theft case ever brought by the state against a private company, the labor commissioner has cited a City of Industry framing and drywall subcontractor, saying it cheated more than 1,000 workers out of minimum wage, overtime and rest breaks. RDV Construction was ordered to pay $11.94 million in back wages and penalties for violations dating back to 2014. The company has appealed the order.


Not a game: Santa Monica video-game giant Activision Blizzard is laying off roughly 8% of its workforce, or nearly 800 employees. The publisher of “Call of Duty” and “World of Warcraft” has bombed with some recent titles and is facing stiff competition from “Fortnite,” an upstart, free-to-play online game that has attracted record users, leading to soaring profits based solely on in-game purchases.


And some recent stories from other publications that caught our eye:

Truly ambitious: The New York Times handicaps Toys R Us’ chances of being resurrected as a retailer called Tru Kids. “So far, there are few details about Tru Kids’ plans. It has no physical operations or e-commerce presence in the United States,” the publication noted. “Any stores Tru Kids opens will probably be smaller than its predecessor’s, with an emphasis on ... in-store experiences and technology-enabled shopping.”


Collusion: From Popular Mechanics, a look at how online pricing algorithms may collude to put consumers at a disadvantage. “The concern is that these autonomous pricing algorithms may independently discover that if they are to make the highest possible profit, they should avoid price wars,” researchers say. “That is, they may learn to collude even if they have not been specifically instructed to do so, and even if they do not communicate with one another.”

The mansion market: Bloomberg Businessweek makes lemonade from global economic troubles by observing that some great deals are to be had in the high-end-property market. “To lure house hunters, sellers of high-end homes are slashing prices by as much as 30%. Many metro areas are succumbing to downward pressure from the U.S.-China trade war, uncertainty in Europe, rising interest rates, or a combination of all three.”

You darn socialists: Peggy Noonan argues in the Wall Street Journal that, with Democrats leaning more leftward, it’s up to Republicans to “save capitalism.” Their job “is to preserve and defend the capitalism that made America a great thing in the world and that, for all its flaws and inequities, created and spread stupendous wealth. The natural job of conservatives is to conserve, in this case that great system.”

Avi’s choice: The Atlantic profiles Hollywood producer Avi Lerner. “At the moment he is the subject of a flood of atypically unwelcome publicity. That’s because, for roughly two weeks, he was just about the only figure of any consequence in Hollywood who publicly stood by Bryan Singer, the director of “Bohemian Rhapsody” and several of the “X-Men” movies, after … allegations of sexual misconduct by Singer against teenage boys.”



The Journal weighs in with a helpful video on how to avoid getting sick at work. A doctor provides a number of tips, including washing your hands the moment you arrive at the office. That soon? Yes, because you don’t want to bring in nasty little germs that will infect you throughout the day. Keep your distance from colleagues. And never, ever touch your face. If you’re like me, good luck with that.

For the latest money news, go to Mad props to Laurence Darmiento for helping put this thing together.

Until next time, I’ll see you in the Business section.