Turmoil at Bezos’ Blue Origin: Talent exodus came after CEO’s push for full return to the office

Jeff Bezos’ Blue Origin is suffering from an elevated turnover rate, has learned, with the space company losing talent primarily from CEO Bob Smith’s pressure to return to the office.

A Blue Origin spokesperson that attrition “has never exceeded 12.7%” on an annualized rate, which measures personnel losses over the 12 months.

While that’s notably above the company’s typical attrition of 8% to 9% a year, multiple people familiar with the situation that, measuring from the start of the calendar year, attrition has already exceeded 20% for 2021 – noting that Blue Origin’s lower rate includes months of data before the recent surge of employees leaving.

“We are seeing attrition rates comparable to those reported by other companies as part of what many are calling ‘The Great Resignation,’” a Blue Origin spokesperson said in a statement.

Given that Blue Origin has nearly 4,000 employees, the departures represent hundreds of personnel this year. The company’s spokesperson told CNBC that Blue Origin’s total headcount has grown by just over 450 people since the end of last year, from 3,503 employees to 3,957 as of August.

One person explained that losing talent causes widespread delays for Blue Origin’s programs, as getting new hires up to speed can take from six months to a year.

Blue Origin’s talent exodus, which reported in August, features employees from top to bottom in the corporate hierarchy, including:

New Shepard SVP Steve Bennett
Chief of mission assurance Jeff Ashby
Senior director of recruiting Crystal Freund
National security sales director Scott Jacobs
New Glenn senior directors Jim Centore, Bob Ess, and Tod Byquist
New Glenn senior finance manager Bill Scammell
Multiple people told CNBC that the departures are a direct reflection on the leadership of Smith – in sharp contrast to the praise they gave for the passion and creativity of their peers within the company. The people who spoke to CNBC did so on condition of anonymity, fearing retribution or loss of job opportunities.

The experience of those who spoke to CNBC, and their view of the company’s management, in many ways matched that of the 21 current and former employees who published an essay about Blue Origin on Thursday, alleging a “toxic” work culture. Smith responded internally to the essay in a company-wide email that was obtained by CNBC, seeking to “reassure” the company and emphasize that there is “no tolerance for discrimination or harassment of any kind.”

Smith runs the company for founder Bezos, who hired him from Honeywell in 2017. Many of those leaving Blue Origin do so reluctantly, CNBC learned, loving the technology’s potential and having bought into Bezos’ vision.

Several people emphasized the exodus is a huge concern for Blue Origin, as the space industry has become incredibly competitive. Additionally, its headquarters in the Seattle suburb of Kent, Washington means that the best engineers can find high-paying work in other sectors. Finding the right new hires may also become more difficult without Freund, who left in September.

Some business units have suffered greater losses than others: The New Shepard program has had people leave in droves, one person said. The finance team has also had steady personnel losses, with a source describing budgeting as a nightmare at Blue Origin. One example of budgeting issues told to CNBC was the Jacklyn ship, which Blue Origin bought from Swedish shipping company Stena Line to turn into a landing platform for its New Glenn rocket boosters. Jacklyn has had number of setbacks during retrofitting, one person said, and the project is 21% over budget, according to another – who noted that delays were related to the Covid pandemic.

The company’s vice president of finance Lisa Graham is leaving next week, two people familiar said.

Blue Origin’s human resources team used to perform exit interviews for anyone who left the company. But HR representatives have largely stopped doing so, two people said, with the few still doing exit interviews “drowning in people” leaving.

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