Did Jeff Bezos Cut Whole Foods Workers Benefits as He Bought a Second Mansion?

Claim

Amazon founder Jeff Bezos was building another mansion with elevators and 25 bathrooms at the same time part-time Whole Foods employees lost health benefits.

Rating

True

Reporting

On November 4 2019, former United States Labor Secretary Robert Reich tweeted that Jeff Bezos was building a mansion in Washington, DC — while at the same time, part-time Whole Foods workers lost their health benefits:

The tweet made a popular appearance on Reddit’s r/worldpolitics, in a thread titled “Tax The Rich!!”:

Tax The Rich!! from worldpolitics

 

According to Reich’s tweet, Bezos’ mansion in Washington, DC would feature 25 bathrooms, two separate elevators, a movie theater, and more than a thousand light fixtures (1,006, to be precise.) Reich added that “Amazon’s Whole Foods” had also recently discontinued health benefits for part-time workers.

Reich describes Whole Foods as “Amazon’s.”  In June 2017, Amazon acquired the Whole Foods chain of supermarkets for $13.7 billion. Amazon, of which Bezos is founder and CEO, became the parent company of Whole Foods in August 2017.

An August 24 2017 statement issued by Amazon about the acquisition only mentions “employees” in a subsection at the bottom . In that mention, Amazon noted the possibility of difficulty “maintaining relationships with employees, customers, and suppliers”:

Cautionary Statement Regarding Amazon Forward-Looking Statements

This [press release] contains forward-looking statements. We use words such as anticipates, believes, expects, future, intends, and similar expressions to identify forward-looking statements. Actual results could differ materially from those projected or forecast in the forward-looking statements. Factors that could cause actual results to differ materially include the following: factors that could affect the timing of the consummation of Amazon’s acquisition of Whole Foods Market; Amazon may be unable to achieve the anticipated benefits of the transaction; revenues following the transaction may be lower than expected; operating costs, customer loss, and business disruption (including, without limitation, difficulties in maintaining relationships with employees, customers, and suppliers) may be greater than expected; Amazon may assume unexpected risks and liabilities; initiatives with Whole Foods Market may distract Amazon’s management from other operations; and the other factors discussed in “Risk Factors” in Amazon’s Annual Report on Form 10-K for the fiscal year ended December 31, 2016 and in Amazon’s other filings with the SEC, which are available at http://www.sec.gov. Amazon assumes no obligation to update the information in this communication, except as otherwise required by law. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date hereof.

Prior to Amazon’s acquisition of Whole Foods in August 2017, the chain reported declining revenues and planned store closings. As of January 2019, Amazon was reported to be looking at former Sears and KMart stores as possible new Whole Foods locations.

On September 12 2019, Amazon confirmed that it was rescinding healthcare benefits for its part-time employees as of January 1 2020, in order to “better meet the needs of our business and create a more equitable and efficient scheduling model.” That translates to part-time employees needing to work ten more hours a week than before in order to qualify for its healthcare plan:

Amazon-owned Whole Foods will be withdrawing medical benefits for hundreds of its part-time workers starting Jan. 1, 2020, the company said Thursday.

In the past, employees needed to work at least 20 hours a week to buy into the health-care plan. Now they will need to work at least 30 hours. Less than 2% of its workforce, or 1,900 employees, will no longer be eligible for medical coverage, under the new policy, the company said.

[…]

“In order to better meet the needs of our business and create a more equitable and efficient scheduling model, we are moving to a single-tier part-time structure,” a company spokesperson said in an email. “We are providing Team Members with resources to find alternative healthcare coverage options, or to explore full-time, healthcare-eligible positions starting at 30 hours per week. All Whole Foods Market Team Members continue to receive employment benefits including a 20% in-store discount.”

In addition to information to help affected employees “explore full-time” open positions, a spokesperson said the company would provide them “with resources to find alternative healthcare coverage options,” presumably government subsidized health insurance through a public exchange.

Although healthcare benefits were withdrawn, the company added:

All Whole Foods Market Team Members continue to receive employment benefits including a 20% in-store discount.

At the time the news was reported, United Food and Commercial Workers (UFCW) International President Marc Perrone said Amazon’s acquisition of Whole Foods involved efforts to “devalue and degrade grocery jobs” at the chain. Perrone lamented the need for workers to take more than one job in order to provide for their families:

Amazon’s plan to cut health care for these part-time employees is one of Jeff Bezos’ most brazen attacks on the quality of jobs at Whole Foods and the communities they support. Too many workers today are already working two to three jobs just to get the hours and benefits they need, and these cuts by Jeff Bezos just made it harder for them … Grocery jobs should be good jobs, and one job should be enough to provide for yourself and your family.

It is true that as founder and chief executive officer of Amazon, Bezos’ company acquired Whole Foods as a subsidiary. It is further true that Whole Foods confirmed that it would stop offering healthcare benefits to some part-time workers as of January 1 2020.

As for Bezos’ Washington, DC mansion and its “2 elevators, 25 bathrooms, 1,006 light fixtures ” and a “full movie theater,” Washingtonian reported in an April 2019 item titled “Here Are the Floor Plans for Jeff Bezos’ $23 Million DC Home”:

Jeff Bezos has been quietly jetting into Washington over the past few years, becoming quite the hobnobber around town … Soon, Washingtonians may see even more of him. In 2016, the Amazon founder and Washington Post owner paid $23 million in cash for the former Textile Museum in Kalorama (yes, his neighbors are the Obamas and Kushner-Trumps). At 27,000 square feet, the mansion was already the biggest home in Washington before he began a $12 million renovation and expansion last year … Overseen by the Barnes Vanze architecture firm, the reno project covers 191 doors (many either custom mahogany or bronze), 25 bathrooms, 11 bedrooms, five living rooms/lounges, five staircases, three kitchens, two libraries/studies, two workout rooms, two elevators—and a huge ballroom.

Washingtonian included details that likely didn’t fit into a single tweet:

According to the documents, the Pope’s four stories will serve primarily as the family’s residence, with all the essentials for a tech-titan billionaire. The lower level (pictured below) has the main living quarters. Note the big whiskey cellar with plentiful drying racks (upper left) and the walk-in wine room (center). There’s also a large lounge complete with a bar, a family kitchen, and an elevator.

On the same day as Reich’s tweet, Washingtonian published an update to their coverage, in which the movie theater is mentioned:

… updated plans included “substantial” work on the foundations of both buildings [of the mansion], including underpinning the walls and resetting the basement slab for the entire Pope House—a likely necessity, [consulting expert Bill] Mulholland surmised, if one is to transform a century-old cellar to accommodate such minor tweaks as an entertainment kitchen, full-scale lounge and whiskey and wine cellars. (The Wood’s slab was reset in the northwest corner, directly below a “Media Room” that calls for tiered seating, implying a movie theater.)

As noted, architectural plans for Bezos’ DC mansion were obtained via a Freedom of Information Act request, not disclosed by Bezos or his representatives:

So when is move-in day? Bezos isn’t saying. (A spokesperson for Amazon declined to comment, as well as architect Ankie Barnes, who cited a “wish to respect our clients’ privacy”) By all accounts, though, he is anxious to make landfall. One person described how they understood the timeline for installations over the summer. “Jeff wanted that done immediately—I mean immediately. Like, ‘Fast, fast fast!’” they said.

In June 2019, Business Insider reported that Bezos was expected to close a deal which included three adjacent Manhattan properties, at an estimated cost of $80 million. A February 2018 article from a separate outlet noted Bezos also owned homes in Washington State, Texas, and California (with two apparent residences in Beverly Hills.)

In sum, Reich’s tweet held:

  • Jeff Bezos is the founder and CEO of Amazon.com;
  • Amazon acquired Whole Foods;
  • Whole Foods rescinded healthcare benefits from part-time employees in 2019;
  • Jeff Bezos’ new mansion in Washington DC has “2 elevators — 25 bathrooms — 1,006 light fixtures — [and a] full movie theater.”

In August 2017 Bezos’ Amazon.com acquired Whole Foods for $13.7 billion, and as of January 2019 sought to expand the chain to new locations. In April 2019, Washingtonian acquired blueprints and planning information for Bezos’ mansion in Washington DC. In early September 2019, a spokesperson for Amazon/Whole Foods acknowledge the company was ceasing to provide healthcare benefits to part-time employees of Whole Foods. And on November 4 2019, Washingtonian revisited the coverage of Bezos’ mansion and its construction to note that in addition to the 25 bathrooms and two elevators, plans indicated a likely movie theater with tiered seating. Reich packed a tremendous amount of detail into a short tweet, all of it essentially accurate.