The problems at the spaceflight company were "systemic," according to the memo, which was obtained by The Washington Post and verified by two former employees familiar with the matter, and "the loss of trust in Blue's leadership is common."
It was one of a number of warnings to Blue Origin's leadership in recent years that the company's culture had become dysfunctional, resulting in low morale and high turnover, significant delays across several major programs and a failure to successfully compete with Elon Musk's venture SpaceX, current and former employees said.
The new management's "authoritarian bro culture," as one former employee put it, affected how decisions were made and permeated the institution, translating into condescending, sometimes humiliating, comments and harassment toward some women and a stagnant top-down hierarchy that frustrated many employees.
As it quickly grew from a small start-up to a large corporation with nearly 4,000 employees, Blue Origin grappled with how to improve its culture. In 2019, the company fired its head of recruiting after employees complained of sexism. A consultant retained by Blue Origin conducted a review of the company's leadership, finding that the primary challenge was Smith's ineffective, micromanaging leadership style, said two former employees, including a top executive.
Bezos, who recently stepped down as chief executive of Amazon, also owns The Washington Post.
This account is based on interviews with more than 20 current and former Blue Origin employees and industry officials with close ties to the firm, who spoke on the condition of anonymity for fear of reprisal. The interviews and documents obtained by The Post reveal wide-ranging employee concerns about Smith's leadership style, a bureaucracy that hampered innovation, and a lack of intervention from Bezos, who employees said was not giving the company enough attention during a crucial period.
"It's bad," said one former top executive. "I think it's a complete lack of trust. Leadership has not engendered any trust in the employee base."
Another said: "The C-suite is out of touch with the rank-and-file pretty severely. It's very dysfunctional. It's condescending. It's demoralizing, and what happens is we can't make progress and end up with huge delays."
The company's cultural issues came to light last month when Alexandra Abrams, the former head of Blue Origin's employee communications, released an essay she said was written in conjunction with 20 other current and former Blue Origin employees. It said the company "turns a blind eye to sexism, is not sufficiently attuned to safety concerns and silences those who seek to correct wrongs." The staffers were not identified in the essay, but three of them confirmed the allegations to The Post on the condition of anonymity for fear of reprisal.
In a statement to The Post, Mary Plunkett, Blue Origin's senior vice president of human resources, said the company takes "all claims seriously and we have no tolerance for discrimination or harassment of any kind. Where we substantiate allegations of misconduct under our anti-harassment, anti-discrimination and anti-retaliation policy we take the appropriate action - up to and including termination of employment."
Blue Origin, based in Kent, Wash., has an anonymous hotline that is staffed 24 hours a day, seven days a week for employees, "where any claims of this nature are registered and then investigated." She said the company also encourages workers to contact human resources or senior leadership, ensuring that "these conversations are strictly confidential and we listen to any claims with empathy and concern."
Bezos and Smith declined to comment for this story. Shailesh Prakash, The Post's chief information officer who also sits on Blue Origin's advisory board, declined to comment.
When Abrams's essay was posted last month, Smith wrote in an email to the company, "It is particularly difficult and painful, for me, to hear claims being levied that attempt to characterize our entire team in a way that doesn't align with the character and capability that I see at Blue Origin every day."
After Blue Origin was notified that this story would publish soon, Bezos on Sunday night tweeted an image of Barron's cover story from 1999 that was critical of Amazon, calling it "Amazon. Bomb."
"Listen and be open, but don't let anybody tell you who you are," Bezos wrote. "This was just one of the many stories telling us all the ways we were going to fail. Today, Amazon is one of the world's most successful companies and has revolutionized two entirely different industries."
In response, Musk tweeted an emoji of a second-place medal.
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Blue Origin, like many aerospace companies, has a male-dominated culture, and several current and former female employees said they faced condescending remarks and comments about their appearance.
"Two friends tried to talk me out of going to Blue because of how toxic it was," one former employee said. There were "lots of comments on people's bodies and appearance," she said. "It was a dispiriting, chaotic experience working there. That behavior was modeled and not held accountable." Younger men new to the company started to "mirror" this conduct, she added.
She said she reported the incidents multiple times to human resources but nothing was done.
In 2019, the company brought in the Perkins Coie law firm to investigate Walt McCleery, its vice president of recruiting, a longtime executive at the firm whose behavior had made several women uncomfortable. One former employee told The Post that in a meeting with an outside company, McCleery turned to the executives and said: "I apologize for [her] being emotional. It must be her time of the month."
McCleery was terminated after the investigation, according to Blue Origin. In a brief interview with The Post last week, McCleery denied the allegations and said they were "not true as far as I'm concerned."
Another top executive was coached by human resources on appropriate workplace behavior after he repeatedly referred to a group of female employees as "mean girls," which continued even after they complained about it to management, according to multiple people familiar with the matter. (The comments ended eventually after counseling.)
These company problems took many new employees by surprise. One former engineer said that she was kneeling at a co-worker's desk in 2016, while they went over engineering drawings together. She said her manager, an older man, walked by and said: "You've only been working here two weeks. You don't have to get on your knees yet."
The comment didn't sink in immediately, the former employee said, partly because she expected Blue Origin to be a welcoming environment.
"I was naive and in denial, maybe," she said. "It wasn't until I thought about it later that it was obvious."
Not everyone says the company culture has grown toxic. One employee who works outside the main headquarters said she has found the culture and leadership welcoming and respectful. Blue Origin's human resources team took immediate action when she reported a claim of "highly inappropriate behavior" from another employee earlier this year, she said.
The company started investigating right away, and the other employee was terminated, further confirming her confidence in the company. "I've never felt like I couldn't go to our leadership for support," she said. "I've never felt like I couldn't go to HR with a problem."
The company said it has not had any inquiries from the U.S. Equal Employment Opportunity Commission (EEOC). (EEOC complaints are not made public unless the agency decides to file suit.) It also has not faced any lawsuits for harassment or hostile work environment. One senior manager said: "A lot of us put a lot of time into creating safe spaces for employees to share experiences and mentor each other. . . . We, I think, do the right thing every time we hear about a complaint. And when the claims have merit, we fire people."
The company also has a diversity, equity and inclusion program, set up by Smith to help the company hire more women and minorities, and help support them once hired. It has nine groups designed to help specific populations, such as veterans and racial groups, feel welcome. One, called "New Ride," is named for Sally Ride, the first female NASA astronaut to reach space, and is intended to help "create an authentic, inclusive, and equitable culture at Blue where LGBT+ employees and allies are empowered to become the greatest, truest version of themselves - both professionally and personally," the company said.
If there is anyone who can get the company back on track, one industry official said, it's Bezos. The company is his passion, the fulfillment of a lifelong dream. And now that he's been to space and stepped down from Amazon, he'll remain focused on Blue Origin: "I think Blue will be a phoenix here in a couple of years because Jeff will figure it out."
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When Bezos founded Blue Origin in 2000, it was to make real a science-fiction fantasy and to fulfill a dream of having "millions of people living and working in space." For the first couple of years, it existed as a tiny start-up, more like a think tank than a space company, that would take a "step-by-step" approach to achieving its goal. For years, Bezos appeared content to move slowly and deliberately, like its mascot, the tortoise.
But in 2017, Bezos brought in Smith to be the company's first CEO, taking over from Rob Meyerson, the company's president, who had been running its day-to-day operations.
The selection of Smith, who has a PhD in aerospace engineering from the University of Texas and a master's degree in business from the Massachusetts Institute of Technology, took many by surprise, especially because he served as a top executive at Honeywell Aerospace, a massive conglomerate with a corporate culture far different from Blue Origin's small, intimate feel.
"When he was hired, everyone was asking, 'Who's Bob Smith?' Nobody knew who he was," one former Blue Origin executive said.
Under his leadership, the company has grown significantly, with facilities in Florida and Alabama, as it has pursued a number of ambitious projects, from building a massive rocket, called New Glenn, to a spacecraft that could land on the moon and even space stations.
The problems with the corporate culture have led to problems with performance, according to current and former employees, manifesting in the growing gap between SpaceX and Blue Origin. The latest defeat came in April, when Blue Origin lost a major NASA contract to build a spacecraft designed to land astronauts on the moon after bidding twice as much as SpaceX. It also lost out on a lucrative round of Pentagon launch contracts in 2019 that went to SpaceX and United Launch Alliance (ULA), a joint venture of Boeing and Lockheed Martin.
Blue Origin has yet to fly its New Glenn rocket, the massive vehicle Bezos originally vowed would reach orbit by last year. It has also suffered delays in the development of Blue Origin's BE-4 engine, which would be used, too, in the new rocket under development by ULA. Because that rocket is to be used to fly national security satellites, the delay has caused concern in the Pentagon and among some members of Congress.
In late 2018, Blue Origin hired a consulting firm to assess why SpaceX was so successful and what it could do to catch up, according to multiple people. The resulting report led to a frank discussion among Blue Origin's leadership regarding problems in the company's culture, and work ethic, its lack of major customers and its presence on social media.
SpaceX "expects and gets more from their employees," one executive concluded, according to minutes of a meeting to discuss the report, which were obtained by The Post. Another executive said Blue "is kind of lazy compared to SpaceX." Musk's venture had won several major government contracts by bidding low, another said. One executive noted: "We need an anchor [U.S. government] tenant to get us to profitability."
There have been some notable successes, however. The company completed its first human spaceflight mission in July, with Bezos onboard, a testament to the safety of the spacecraft. On Wednesday morning, it plans another spaceflight mission, this time with actor William Shatner, best known for playing Captain Kirk on the original "Star Trek" series, Bezos's favorite childhood TV show.
In another memo obtained by The Post, an employee complained about the company moving ahead with a rocket test launch last year at the beginning of the coronavirus pandemic. "I cannot in good conscience stand with an organization willing to consider putting its private mission ahead of the safety of the general community," the person wrote. The issue was first reported by the Verge. A Blue Origin spokesperson told the publication at the time: "We hold safety as our highest value. Period."
Smith and the executives he brought in, many from legacy aerospace companies, sat in an executive suite in a new office building, isolated from the rest of the staff. While that is not unusual for many large corporations, it was off-putting for many employees at Blue Origin who had been used to their leaders sitting and mingling among them.
"That wasn't appreciated," one former executive said. "It was an I'm-above-you message."
This apparent aloofness persisted as the new management settled in. At a company town hall meeting, employees submitted a list of questions for Smith about the future of the company and his leadership style.
When he didn't address any of them, one employee sarcastically submitted a softball, "What's your favorite kind of ice cream?"
That one, Smith took. "Sorbet," he said, according to multiple people at the meeting.
At one point, employees said they rebelled after the company announced it would end its long-standing practice of distributing free mission patches after launches, a cut made because the company was "trying to become profitable," Abrams told The Post she was instructed to tell employees.
Since the days of NASA's Apollo moon program, mission patches have been a way to commemorate spaceflight missions, and Blue Origin's employees were angry, wondering how much could they really cost. Eventually the executives relented and agreed to distribute the patches, but the incident became known as "patchgate."
Concerned about the company's leadership, the head of human resources brought in an outside management consultant, who interviewed Smith and the members of his team in 2019 and concluded that Smith's micromanaging style was often ineffective, according to a former senior executive and confirmed by another person familiar with the matter.
Smith bristled at the report, which was first reported by CNBC, and refused to meet on the subject again.
The troubles at Blue Origin happened to correspond with a period of personal upheaval for Bezos. "Jeff got divorced and he was distracted," said one of the top former executives who left. "Blue's workforce was going up and his net worth was going up, and there were a lot of things on his plate, like the climate fund that he wanted to do. Combined with his personal life . . . that gave Bob an opportunity to really turn Blue upside down. He was CEO, so Jeff gave him a lot of rope."
The people interviewed for this story said Bezos was content to let Smith run the company. And Smith, one former executive said, "made it real clear the only conduit to Jeff was him. And so there was no check and balance."
When Bezos did come in on Wednesdays, the day he set aside for Blue Origin, the visits and their aftermath could be "extremely disruptive," a former executive said. Engineers at the company would pitch him ideas, and he would say they were good ones. Then, armed with Bezos's tacit approval, they would try to make them reality.
"Jeff may have liked the idea, but guess what? We didn't budget for it. It's not in the schedule. It's not in the design," the person said. "He just said he liked an idea."
One former machinist said he took Bezos up on his offer, made to the entire company, to approach with ideas to become more efficient. But after he pitched Bezos and returned to the factory floor, he said, "two of my managers chewed me out and said I was going behind their backs."
In July, Bezos stepped down as CEO of Amazon and transitioned to a role as executive chair. That month, he also flew to the edge of space aboard Blue Origin's first human spaceflight mission. It was a profound moment for him, he said at the time, and he vowed to spend more of his time focused on Blue Origin.
Over the past several months, he has and is also spending more of his own money to help the company compete, several people confirmed. He has been deeply involved in the fight over the NASA lunar lander contract that SpaceX won, those people said.
"He's super jealous of SpaceX," one industry official, who spoke anonymously to discuss private matters, said. "He's really worried about them. That is very clear."
One of the former Blue Origin executives said that even though Blue Origin teamed up with Lockheed Martin, Northrop Grumman and Draper on the lunar lander contract, it was no surprise that the company lost.
"We can't manage ourselves," the person said. "Not one of our programs is on cost and schedule. Yet you think we're going to manage Lockheed Martin, Northrop Grumman and Draper? It's just not going to happen."
The industry official said his advice for Bezos would be to "start over. You should be the CEO if you really want to do something, but you basically need a new executive team and a totally new culture."
Published : October 12, 2021
By : The Washington Post