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THE HEADLINES
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THE GOSPEL ACCORDING TO JOHN (STUMPF)
Amex appears to have ripped a page straight out of Wells Fargo’s sales practice’s playbook. The financial service company’s foreign exchange international payments group stands accused of recruiting clients with low currency conversion rates then raising prices unbeknownst to the customer. The practice dates back to 2004.
The reason? According to current and former employees who have blown the whistle, Amex pays commission based on margins and transaction volume, thus incentivizing less-than-scrupulous behavior.
Worse yet, some salespeople say they were encouraged to employ the scheme at company sanctioned training. For the most part small to mid-sized businesses were targeted as they were deemed less likely to audit the fees (read: stupid).
And what happened if these real-life Glengarry Glen Ross employees were caught? Blame a technical glitch or intern oversight, of course.
Water Cooler Talking Point: “Why do I have a feeling that the “former Amex employees” were actually just Wells Fargo’s compliance team trying to get the Feds off their case for a minute?”
YOU USED TO CALL ME ON MY 4G CELL PHONE …
Nokia and T-Mobile struck a $3.5B deal to make the former the leading provider of 5G hardware for the carrier. Nokia will provide technology, software, and services.
Verizon has begun bringing 5G networks online in Houston, Sacramento, and Los Angeles, but the technology isn’t mainstream yet thanks to high infrastructure costs. This will be the world’s largest 5G deal to date, and T-Mobile will be the first nationwide provider to invest heavily in the tech.
5G wireless technology is the next frontier in computing and data transfer. With it comes faster speeds, lower latency (wait time for downloads), and greater capacity. An iOS update will still take approximately three days though.
Water Cooler Talking Point: “*Fortnite players begin flocking to Houston, Sacramento, and California*”
WHO’S HUNGRY?
US Foods is, apparently. The restaurant wholesaler is buying up five food businesses from Services Group of America for $1.8B. No mention of whether or not that includes a drink.
The purchase adds around $3.2B in sales and 3.4k employees to the US Foods portfolio. US Foods will use the acquisition to extend its reach and offerings in the highly lucrative Northeast region of the US.
Not everyone was thrilled with the news, as shares of US Foods fell 16% following the announcement. A shipping volume decline of 0.9% and disappointing earnings probably didn’t help. Plus the company is facing a major labor shortage which has led to a slew of missed deliveries. So much for 30 minutes or its free.
Water Cooler Talking Point: “Hell hath no fury like a restaurant owner scorned. Have you ever seen Gordon Ramsay on Hell’s Kitchen?”
IN OTHER NEWS
- The CBS BoD has decided to seek outside counsel to investigate sexual misconduct allegations against CEO Les Moonves dating back to the 1980’s as a result of its meeting yesterday. So, what is it ya say you do here?
- Tesla created a limited-edition, $1,500 surfboard to “help the company stay afloat.” It sold out in one day, obviously.
- Starbucks is making a move to rebound from a 2 percent decrease in sales within China as of July 1 by partnering with Alibaba. The hope is that Alibaba’s delivery arm Ele.me will drive an increase in orders.
- Johnson & Johnson is going natural. The consumer health arm of the company reached a deal to buy children’s cough-syrup maker, Zarbee’s Naturals in an attempt to bolster sales. Overheard at a millennial mommy-and-me class: “It’s not touching my baby unless it’s organic and all-natural.”
- Uber’s self-driving trucks division is dead. It was almost 2 years old. The deceased is survived by its lower tonnage, equally complex, self-driving car division.
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