Business
Eaze cannabis delivery drivers threaten strike ahead of annual pot holiday
California cannabis delivery company Eaze may face a work stoppage next week, a peak sales time for weed businesses.
Nearly 600 cannabis delivery drivers and depot staff across California who work at Eaze and its subsidiary Stachs are represented by various locals of the United Food and Commercial Workers Union.
Last week, they voted to approve a strike, the union said, after contract negotiations with Eaze stalled over disagreements about hourly wages as well as the mileage reimbursement rate for drivers, who use their own cars to make deliveries. The vote gives leaders authority to call a strike if contract talks stall at a bargaining session scheduled for Monday.
“We are totally willing to negotiate and if you want to give us a deal, we are into it, but if you won’t, we will strike,” said Ron Swallow, a delivery driver at Eaze’s depot in Van Nuys, at a Wednesday news conference held by UFCW Local 770, which represents 180 workers at Eaze depots in Southern California.
Workers at his depot in Van Nuys approved a strike authorization by a 95% margin, according to Swallow.
“I am super proud of all my co-workers, they have stood united while their cars fell apart, while their rent is two months late,” Swallow said.
Ed Gutierrez, deputy director of UFCW Local 770’s cannabis division, said a super-majority of Eaze workers across the state voted in favor of a strike. The union declined to disclose a specific percentage and total number of ballots cast.
Cory Azzalino, chief executive officer at Eaze, said the company is hiring a “large cohort of new drivers” in anticipation of a work stoppage.
“Eaze is preparing itself to maintain operations in the event of a strike,” Azzalino said. “Corporate and depot staff will assist in keeping operations as normal as possible for our customers.”
Eaze, the largest multi-state cannabis delivery operator in the U.S., launched in 2014 and was valued at $700 million, with more than $255 million in total investment capital raised, according to TechCrunch.
But the San Francisco-based company has struggled with cash flow problems and legal issues, with its former chief executive pleading guilty to a $100-million bank fraud scheme.
A lawsuit filed last year by the founders of Green Dragon, a cannabis retail company that merged with Eaze in late 2021, accused Eaze of defrauding investors by intentionally concealing its poor finances in order to finalize the merger.
Stachs and Eaze workers at the Van Nuys depot voted to unionize in March 2023, with workers in La Brea, Gardena, Silverlake and other Southern California locations following suit later in the year.
Six depots in Southern California and five in Northern California have unionized with various UFCW locals, which are coordinating to negotiate a statewide contract. Negotiations have been ongoing since August 2023.
UFCW Local 770 counts about 700 cannabis workers among the 31,000 healthcare, retail, grocery, and packing workers it represents in Southern California. Some Eaze workers in Sacramento recently unionized with the Teamsters.
Delivery drivers have complained that the company’s decision last summer to slash the reimbursement rate for drivers from the 65.5 cents per mile rate recommended by the IRS to about 40 cents per mile — with slight variation depending on location — has cut drivers’ pay by $300-$700 per month. Drivers currently earn minimum wage, plus tips.
Another sticking point is Eaze’s use of a third-party company, Motus, to calculate a variable mileage rate based on where drivers are located and gas prices, which drivers said keeps them in the dark about how their reimbursement is calculated.
Lori Riehle, a delivery driver based out of Eaze’s depot in Silverlake, said the mileage rate reduction “has been a nightmare.”
“Reimbursement is not a perk they give us… we need that money,” Riehle said. “Today, my savings are gone — I’m reaching for my credit card to get through the end of the pay period.”
Azzalino, the Eaze executive, said the company’s offer was reasonable, considering troubling economic headwinds the weed industry faces and considering it’s higher than the state standard of a $0.35 reimbursement rate set for rideshare and delivery drivers classified as independent contractors under gig worker law Proposition 22.
“In an industry being suffocated from high taxes and over regulation, Eaze pays our drivers fair wages averaging over $25 per hour including tips, as well as benefits and consistent scheduling,” Azzalino said in an email. “Eaze has not earned a profit in its history, so this is not the case of old industry hoarding profits.”
There is limited turnover among drivers, who on average, have worked at the company for 2.4 years, “which is evidence of a reasonable compensation package,” Azzalino said.
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Eric Goepel, the founder and CEO of the Veterans Cannabis Coalition, said at the Wednesday news conference that cannabis delivery workers serve as a lifeline for patients who rely on cannabis to treat pain and lamented broader economic instability for players in the cannabis industry.
California’s “bizarre” taxes and regulatory scheme makes it nearly impossible to turn a profit, he said, but squeezing workers is a “terrible miscalculation” by Eaze.
“The way forward here is not by going after the workforce and trying to nickel and dime them out of $500, $600 a month that they most desperately need, and which adds a smidgen of a fraction to their actual bottom line, when a company has raised hundreds of millions of dollars,” Goepel said.
Business
U.S. Space Force awards $1.6 billion in contracts to South Bay satellite builders
The U.S. Space Force announced Friday it has awarded satellite contracts with a combined value of about $1.6 billion to Rocket Lab in Long Beach and to the Redondo Beach Space Park campus of Northrop Grumman.
The contracts by the Space Development Agency will fund the construction by each company of 18 satellites for a network in development that will provide warning of advanced threats such as hypersonic missiles.
Northrop Grumman has been awarded contracts for prior phases of the Proliferated Warfighter Space Architecture, a planned network of missile defense and communications satellites in low Earth orbit.
The contract announced Friday is valued at $764 million, and the company is now set to deliver a total of 150 satellites for the network.
The $805-million contract awarded to Rocket Lab is its largest to date. It had previously been awarded a $515 million contract to deliver 18 communications satellites for the network.
Founded in 2006 in New Zealand, the company builds satellites and provides small-satellite launch services for commercial and government customers with its Electron rocket. It moved to Long Beach in 2020 from Huntington Beach and is developing a larger rocket.
“This is more than just a contract. It’s a resounding affirmation of our evolution from simply a trusted launch provider to a leading vertically integrated space prime contractor,” said Rocket Labs founder and chief executive Peter Beck in online remarks.
The company said it could eventually earn up to $1 billion due to the contract by supplying components to other builders of the satellite network.
Also awarded contracts announced Friday were a Lockheed Martin group in Sunnyvalle, Calif., and L3Harris Technologies of Fort Wayne, Ind. Those contracts for 36 satellites were valued at nearly $2 billion.
Gurpartap “GP” Sandhoo, acting director of the Space Development Agency, said the contracts awarded “will achieve near-continuous global coverage for missile warning and tracking” in addition to other capabilities.
Northrop Grumman said the missiles are being built to respond to the rise of hypersonic missiles, which maneuver in flight and require infrared tracking and speedy data transmission to protect U.S. troops.
Beck said that the contracts reflects Rocket Labs growth into an “industry disruptor” and growing space prime contractor.
Business
California-based company recalls thousands of cases of salad dressing over ‘foreign objects’
A California food manufacturer is recalling thousands of cases of salad dressing distributed to major retailers over potential contamination from “foreign objects.”
The company, Irvine-based Ventura Foods, recalled 3,556 cases of the dressing that could be contaminated by “black plastic planting material” in the granulated onion used, according to an alert issued by the U.S. Food and Drug Administration.
Ventura Foods voluntarily initiated the recall of the product, which was sold at Costco, Publix and several other retailers across 27 states, according to the FDA.
None of the 42 locations where the product was sold were in California.
Ventura Foods said it issued the recall after one of its ingredient suppliers recalled a batch of onion granules that the company had used n some of its dressings.
“Upon receiving notice of the supplier’s recall, we acted with urgency to remove all potentially impacted product from the marketplace. This includes urging our customers, their distributors and retailers to review their inventory, segregate and stop the further sale and distribution of any products subject to the recall,” said company spokesperson Eniko Bolivar-Murphy in an emailed statement. “The safety of our products is and will always be our top priority.”
The FDA issued its initial recall alert in early November. Costco also alerted customers at that time, noting that customers could return the products to stores for a full refund. The affected products had sell-by dates between Oct. 17 and Nov. 9.
The company recalled the following types of salad dressing:
- Creamy Poblano Avocado Ranch Dressing and Dip
- Ventura Caesar Dressing
- Pepper Mill Regal Caesar Dressing
- Pepper Mill Creamy Caesar Dressing
- Caesar Dressing served at Costco Service Deli
- Caesar Dressing served at Costco Food Court
- Hidden Valley, Buttermilk Ranch
Business
They graduated from Stanford. Due to AI, they can’t find a job
A Stanford software engineering degree used to be a golden ticket. Artificial intelligence has devalued it to bronze, recent graduates say.
The elite students are shocked by the lack of job offers as they finish studies at what is often ranked as the top university in America.
When they were freshmen, ChatGPT hadn’t yet been released upon the world. Today, AI can code better than most humans.
Top tech companies just don’t need as many fresh graduates.
“Stanford computer science graduates are struggling to find entry-level jobs” with the most prominent tech brands, said Jan Liphardt, associate professor of bioengineering at Stanford University. “I think that’s crazy.”
While the rapidly advancing coding capabilities of generative AI have made experienced engineers more productive, they have also hobbled the job prospects of early-career software engineers.
Stanford students describe a suddenly skewed job market, where just a small slice of graduates — those considered “cracked engineers” who already have thick resumes building products and doing research — are getting the few good jobs, leaving everyone else to fight for scraps.
“There’s definitely a very dreary mood on campus,” said a recent computer science graduate who asked not to be named so they could speak freely. “People [who are] job hunting are very stressed out, and it’s very hard for them to actually secure jobs.”
The shake-up is being felt across California colleges, including UC Berkeley, USC and others. The job search has been even tougher for those with less prestigious degrees.
Eylul Akgul graduated last year with a degree in computer science from Loyola Marymount University. She wasn’t getting offers, so she went home to Turkey and got some experience at a startup. In May, she returned to the U.S., and still, she was “ghosted” by hundreds of employers.
“The industry for programmers is getting very oversaturated,” Akgul said.
The engineers’ most significant competitor is getting stronger by the day. When ChatGPT launched in 2022, it could only code for 30 seconds at a time. Today’s AI agents can code for hours, and do basic programming faster with fewer mistakes.
Data suggests that even though AI startups like OpenAI and Anthropic are hiring many people, it is not offsetting the decline in hiring elsewhere. Employment for specific groups, such as early-career software developers between the ages of 22 and 25 has declined by nearly 20% from its peak in late 2022, according to a Stanford study.
It wasn’t just software engineers, but also customer service and accounting jobs that were highly exposed to competition from AI. The Stanford study estimated that entry-level hiring for AI-exposed jobs declined 13% relative to less-exposed jobs such as nursing.
In the Los Angeles region, another study estimated that close to 200,000 jobs are exposed. Around 40% of tasks done by call center workers, editors and personal finance experts could be automated and done by AI, according to an AI Exposure Index curated by resume builder MyPerfectResume.
Many tech startups and titans have not been shy about broadcasting that they are cutting back on hiring plans as AI allows them to do more programming with fewer people.
Anthropic Chief Executive Dario Amodei said that 70% to 90% of the code for some products at his company is written by his company’s AI, called Claude. In May, he predicted that AI’s capabilities will increase until close to 50% of all entry-level white-collar jobs might be wiped out in five years.
A common sentiment from hiring managers is that where they previously needed ten engineers, they now only need “two skilled engineers and one of these LLM-based agents,” which can be just as productive, said Nenad Medvidović, a computer science professor at the University of Southern California.
“We don’t need the junior developers anymore,” said Amr Awadallah, CEO of Vectara, a Palo Alto-based AI startup. “The AI now can code better than the average junior developer that comes out of the best schools out there.”
To be sure, AI is still a long way from causing the extinction of software engineers. As AI handles structured, repetitive tasks, human engineers’ jobs are shifting toward oversight.
Today’s AIs are powerful but “jagged,” meaning they can excel at certain math problems yet still fail basic logic tests and aren’t consistent. One study found that AI tools made experienced developers 19% slower at work, as they spent more time reviewing code and fixing errors.
Students should focus on learning how to manage and check the work of AI as well as getting experience working with it, said John David N. Dionisio, a computer science professor at LMU.
Stanford students say they are arriving at the job market and finding a split in the road; capable AI engineers can find jobs, but basic, old-school computer science jobs are disappearing.
As they hit this surprise speed bump, some students are lowering their standards and joining companies they wouldn’t have considered before. Some are creating their own startups. A large group of frustrated grads are deciding to continue their studies to beef up their resumes and add more skills needed to compete with AI.
“If you look at the enrollment numbers in the past two years, they’ve skyrocketed for people wanting to do a fifth-year master’s,” the Stanford graduate said. “It’s a whole other year, a whole other cycle to do recruiting. I would say, half of my friends are still on campus doing their fifth-year master’s.”
After four months of searching, LMU graduate Akgul finally landed a technical lead job at a software consultancy in Los Angeles. At her new job, she uses AI coding tools, but she feels like she has to do the work of three developers.
Universities and students will have to rethink their curricula and majors to ensure that their four years of study prepare them for a world with AI.
“That’s been a dramatic reversal from three years ago, when all of my undergraduate mentees found great jobs at the companies around us,” Stanford’s Liphardt said. “That has changed.”
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