The Big 5️⃣ - July 13, 2025
1️⃣ Prime Day Wasn’t So Prime This Year
2️⃣ UPS Wants to Buy Out Its Drivers
3️⃣ Goldman Wants Your Loyalty
4️⃣ And if You Won’t, Devin Will
5️⃣ That’ll Be $200 Million Please
1️⃣ Prime Day Wasn’t So Prime This Year
Amazon’s annual event to generate summer sales and forecast the holiday season didn’t go as planned. On the first day of Prime Day, traffic was down 41%.
One X user posted that there were no deals this year. It’s no secret, retailers boost prices right before major shopping events like Prime Day or Black Friday to create the illusion of savings. A commerce company that partners with Amazon sellers reported that the average discount rate this year was about 3% less than last year.
But the New York Post reports another reason why Prime Day sales may be down. Businesses that sell on Amazon are struggling to eat the cost of tariffs which may be a contributing factor to lower discounts:
Amazon sellers are offering fewer discounts during this week’s annual Prime Day sales event, saying their margins are too tight as they battle high costs from President Trump’s tariffs, according to a report.
Despite the lackluster sales and impact of tariffs, shoppers seem undeterred. According to Axios, spending so far is up 10% from last year. But most of that spending seems to be on lower ticket items.
Prime Day – or rather, days – is a bellwether for the rest of the consumer economy. Whether it’s inflation or tariffs, it will reveal how resilient consumers truly are to higher prices.
2️⃣ UPS Wants to Buy Out Its Drivers
For the first time since UPS began delivering packages in 1907, the company is offering buyouts to its drivers. This is part of a broader cost-cutting strategy I wrote about here.
The Wall Street Journal reports:
United Parcel Service is offering buyouts to delivery drivers for the first time in its 117-year history. The company is seeking cost savings because of stagnant parcel volumes, rising labor costs and a long slump in the company’s stock price.
The relationship between labor and the company’s share price is worth drawing attention to. Back in 2023, UPS negotiated a new contract that drew a lot of buzz. At $170,000 a year, the contract made UPS drivers one of the highest paid jobs in the country. But shareholders weren’t too thrilled about it:
UPS drivers are among the highest-paid delivery drivers in the U.S. The average full-time driver will earn around $170,000 annually, including benefits, by the end of a five-year contract that UPS signed with the Teamsters in 2023. Many investors thought the company conceded too much ground to the union. UPS shares are down about 45% since July 24, 2023, the day before the company and the union reached their agreement.
It appears the company is trying to placate investors by reducing headcount to cut costs. The Journal reports that in 2023, 200 pilots were offered a buyout and took it. Since 2024, the company has announced two rounds of layoffs, affecting 32,000 employees. Now it appears UPS is looking at buyouts as a way to circumvent its contractual obligation to the Teamsters.
As I wrote in this week’s essay, UPS is the sixth largest private sector employer in the United States. It employs 330,000 workers across the country. UPS is a market mover. The personnel decisions the company makes today will affect the broader labor market tomorrow, especially as it relates to headcount and profitability.
3️⃣ Goldman Wants Your Loyalty
Private equity is gunning for Wall Street. And the big banks aren’t too keen about that.
Back in June, JP Morgan told junior bankers they’d be ousted if they were caught accepting future-dated offers. Now Morgan Stanley is requiring its bankers to take a loyalty oath. Bloomberg reports:
The investment bank will ask new analysts to certify every three months that they haven’t accepted jobs elsewhere, according to people familiar with the matter, who asked not to be identified discussing the confidential plan.
The concern stems from competition with private equity. Firms like Blackstone, Apollo Global Management, and the Carlyle Group are snatching up junior talent in an effort to potentially get insider knowledge on pending deals. Per Bloomberg:
But if trainees secretly promise to take a job in the future, it can create conflicts of interest. Junior bankers are often privy to confidential information about banks’ proposed or pending deals — information that may be valuable outside the company.
While I think Main Street Americans have a healthy distrust of big corporate banks – especially after the 2008 bailouts – the rise of private equity is a concerning trend that seems to be flying under the radar.
The big banks have already engaged in mass layoffs and signaled there isn’t a future for junior bankers. Savvy wannabe bankers may already see the writing on the wall and be looking to private equity as a more lucrative alternative.
Private equity firms, in my opinion, are parasitic. They are known for hollowing out companies. Toys “R” Us, Payless, and Sears are all examples of businesses where private equity firms came in, loaded the companies with debt, and underinvested in them, eventually leading to each company filing for bankruptcy.
A lot of the jobs on Main Street these days are actually jobs with big retail chains owned by private equity. Think: Michaels, Barnes & Noble, Forever 21, Joann Fabrics etc. Many of these chains employ people in the local economy but are owned by private equity firms that don’t have an interest in keeping these people employed.
The problem with private equity is that it engages in leveraged buyouts which lead to layoffs and store closures. 31,000 people lost their jobs when Toys “R” Us went bankrupt in 2017. And 19,000 jobs were lost when Joann Fabrics filed for bankruptcy earlier this year.
The only people who win when private equity comes to town is private equity. While it’s understandable that debt-burdened Gen Zers want to make the most of their careers, funneling more and more of them into private equity might not be the best for society. And asking employees to take loyalty oaths probably isn’t a good idea either.
If private equity isn’t on your radar, it’s something you might want to pay more attention to. It appears to be another bubble that’s begging to burst.
Learn more about how private equity works and what its objectives are by checking out this video by Ian Carroll:
And this video by How Money Works:
4️⃣ And if You Won’t, Devin Will
Unrelated (but also kind of related) to Goldman’s push to get junior bankers to pledge their loyalty, the Wall Street megalith has hit a major milestone in outsourcing human labor altogether.
CNBC reports Goldman Sachs has onboarded an AI coder named Devin to compliment the work currently being done by 12,000 of the company’s human software developers. According to CNBC:
The bank is testing an autonomous software engineer from artificial intelligence startup Cognition that is expected to soon join the ranks of the firm’s 12,000 human developers, Goldman tech chief Marco Argenti told CNBC.
The program, named Devin, became known in technology circles last year with Cognition’s claim that it had created the world’s first AI software engineer. Demo videos showed the program operating as a full-stack engineer, completing multi-step assignments with minimal intervention.
Starting at $20 a month, companies can license Devin to develop apps and fix bugs, something that those same companies used to pay human workers well over six-figures to do.
According to AI 2027, a scenario about how AI disruption will unfold in the next two years, AI agents will be capable enough to begin replacing developers by late 2026:
The job market for junior software engineers is in turmoil: the AIs can do everything taught by a CS degree, but people who know how to manage and quality-control teams of AIs are making a killing. Business gurus tell job seekers that familiarity with AI is the most important skill to put on a resume.
The deployment of Devin on Wall Street signals this projection could be on – or ahead of – schedule. The companies building AI agents and implementing them into their workforces are the ones that will come out ahead amidst all the job losses.
Right now human workers are working alongside AI agents but there will come a point where fewer workers are needed than are currently employed. The digitization of Wall Street and strong imperative to generate the highest return on investment mathematically possible suggests Wall Street could be one of the primary epicenters for AI deployment.
This sheds an interesting light on the implementation of a loyalty oath. As competition for jobs ramps up, will loyalty oats extend to other workers beyond Wall Street? And what will that mean for workers’ ability to leverage their skills as free agents in the workforce of tomorrow?
5️⃣ That’ll Be $200 Million Please
AI talent recruitment is starting to look like the NBA Draft. If you’re really good at your job and have deep expertise in AI, you could be worth millions of dollars. Meta recently poached a distinguished engineer from Apple for $200 million. Bloomberg reports:
Meta hired Ruoming Pang, who ran Apple’s AI models team, with a pay package in the hundreds of millions over a several-year period, according to people with knowledge of the matter, who declined to be named discussing unannounced compensation details. Apple didn’t try to match the offer, as it far exceeds pay at the company for leaders other than Chief Executive Officer Tim Cook.
But just like professional athletes there is a caveat to these types of compensation packages: your pay is incumbent on your performance. And this matters when we’re talking about AI.
Artificial general intelligence is an inevitability at this point as countries and companies within those countries are racing to be the first to create it. AGI is basically the ability for AI to act and think autonomously, independent of human oversight. There’s a strong incentive for the creators of AGI to build it as quickly as possible. Bloomberg notes:
From a pure numbers standpoint, the superintelligence group has some of the highest compensation of any corporate job, including CEO roles at the world’s major banks. But much of the money is tied up in performance targets and unlocked during years of loyalty, meaning it might not all be received if employees leave early or if the stock doesn’t perform well.
One commenter on LinkedIn had this to say about Meta’s latest talent acquisition:
It’s pretty evident that the incentives between the companies building AI, the workers recruited to do the actual building, and the public writ large are not aligned. A handful of people at a handful of companies are going to shape the future that you and I will live in.
If you haven’t had a chance yet to check this out, I think it’s worth bookmarking for your reading list:
It dives into some of the risks of AI development and important things you’ll want to be aware of as the race to build AGI progresses.
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📑 eBook Update
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Regarding how Private Equity hollows out a business:
https://www.foxnews.com/us/paul-singer-sidney-nebraska-cabelas-bass-pro-shops-merger
Although I still shop there, the quality of the merchandise is not what it used to be. Also, employees used to be happy to work there, now, most are doing a job.