By Harry McCracken2 minute Read
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For most gigantic tech companies, the most furious growth happens early on. As in so many areas, however, Amazon is a fascinating exception to conventional behavior. Beth Galetti, Amazon’s HR chief—whom I profiled for our May issue—is currently presiding over the biggest hiring spree in the company’s history. With a headcount of 647,000, the company has more than six times as many employees as it did when she arrived in 2013 and is adding an average of 337 additional workers a day.
1997, 614 employees
Still unprofitable and battling established behemoths such as Barnes & Noble, Amazon goes public at $18 a share.
1998, 2,100 employees
International expansion begins as the company opens sites tailored for the U.K. (with 1.2 million books) and Germany (335,000 titles).
2000, 9,000 employees
Amazon allows third-party merchants to sell through its storefront. By 2017, such shipments would account for the majority of sales.
2001: 7800 employees
After the dot-com bubble bursts, Amazon’s stock tumbles. It lays off 15% of staffers, ushering in a brief era of employee shrinkage.
2002, 7,500 employees
In a departure from its retailing roots, Amazon begins providing online infrastructure to other companies. Amazon Web Services establishes a new industry—that’s now a $30-billion business.
2005, 12,000 employees
Amazon Prime lets customers pay an annual fee for fast shipping. Today, it has 100 million members, who also get everything from streaming video to Whole Foods discounts.
2007, 17,000 employees
The Kindle e-reader is the first of a bevy of Amazon gadgets, including tablets, TV boxes, and speakers (and the famously unsuccessful Fire Phone).
2009, 24,300 employees
Amazon pays $1.2 billion for shoe purveyor Zappos—noted for its quirky culture and obsessive customer service—and promises to leave it alone. (It does.)
2011, 56,200 employees
Between offices, warehouses, and data centers, Amazon now occupies 48 million square feet of space and counting.
2013, 117,300 employees
Amazon enters India, with a site that complies with local regulations by offering only products from third-party sellers.
2014, 154,100 employees
Robots invade Amazon fulfillment centers as the company begins automating the stocking process using technology from its Kiva Systems subsidiary.
2015, 230,800 employees
The first-ever Amazon brick-and-mortar store opens in Seattle—a bookshop that promotes its tomes with ratings and reviews from online customers.
It’s always “Day 1” at Amazon—that’s our approach to doing everything with the energy and entrepreneurial spirit of a new organization on its first day.
How we’re taking care of employees during COVID-19
We listen to our employees and innovate to keep each of them healthy and safe while they are at work.
Amazon ranks #2 on Forbes World’s Best Employers list
Amazon.com said it now has about 1 million employees after hiring 250,000 workers in the third quarter, part of a growth spurt driven by booming ecommerce sales during the coronavirus pandemic and a milestone for a company founded in 1995 by Jeff Bezos as an online bookseller.
Amazon.com has since expanded into almost every corner of the retail sector, ranging from its own line of clothing to grocery stores. Despite its rapid ascent, Amazon still has fewer workers than the nation's biggest private employer, Walmart, which has 2.2 million global workers.
Even so, Amazon's explosive growth underscores the historic shift in financial might from manufacturers such as General Motors, U.S. Steel and General Electric. In the 1950s, these three corporations were the country's biggest employers, with a combined workforce of more than 1 million employees at the time. Today, the three employ about 400,000 workers as the U.S. economy has shed factory jobs in favor of service-oriented work.
The pandemic is also pushing the labor market in new directions. Businesses such as grocery stores that sell household basics like groceries or cleaning supplies have seen a surge in demand as Americans hunkered down at home this spring. But industries that cater to tourists, such as hospitality and travel, have suffered as consumers cut back travel plans amid the pandemic.
"There is no doubt that Amazon's latest results show it continues to be a winner from disruption caused by the pandemic," said Neil Saunders, managing director of GlobalData, by email. "Amazon is in a very strong position to expand parts of its operation like logistics and delivery."
In a conference call on Thursday, Amazon Chief Financial Officer Brian Olsavsky said the company hired "a lot more people to support the strong customer demand."
After hiring 250,000 full-time and part-time workers in the quarter ended in September, Amazon has hired another 100,000 workers in October, he said. The jobs pay a minimum of $15 an hour and include benefits such as health insurance, retirement benefits and parental leave, he added.
At the same time, other big employers are having mass layoffs, including Disney, which last month said it would cut 28,000 workers as its theme parks struggle to regain their footing. Claims for unemployment benefits remain historically high, and more than 22 million Americans are receiving jobless benefits.
Backlash over work policies
Even amid its hiring spree during the pandemic, Amazon faced a backlash over its employment practices, with some warehouse workers protesting the company's policies and what some claimed to be foot-dragging by the company on protecting employees from COVID-19.
In June, some warehouse workers sued the retailer for allegedly failing to provide protections against the coronavirus, such as adequate supplies to sanitize workspaces. One worker claimed she contracted COVID-19 at the warehouse and subsequently infected her cousin, who died after experiencing COVID-19-like symptoms.
Such controversies haven't dented Amazon's growth. On Thursday, Amazon reported record profit and revenue during the third quarter. The company reported a $6.3 billion profit in the three months ending September 30, nearly triple its earnings in the year-ago period.
The online shopping giant is also expecting a big end to the year as the holiday shopping season picks up. Amazon said it expects fourth-quarter sales to rise as much as 38% from a year ago to between $112 billion and $121 billion.
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Is Amazon’s high turnover a huge red flag or the secret to its dominance?
Amazon is currently the second-largest private employer in the U.S., and it could become the largest in a few years. But a new investigation by the New York Times raises significant questions about the company’s management of warehouse workers and discovers an unusually high rate of turnover among its hourly associates — around 150% a year, even before the pandemic, which means the company was losing around 3% of its warehouse workers each week (nearly double the rate of similar businesses).
“There’s an open question now — because the turnover is so high, and Amazon’s needs for growth and employment is so large — about whether or not it’s sustainable,” said New York Times technology reporter Karen Weise, who reported the story along with Jodi Kantor, a Pulitzer Prize-winning investigative reporter at the Times.
“In conversations with current and former executives and leaders in Seattle, there is a palpable fear that Amazon will not have enough workers to be able to serve the customer demands that it foresees,” Weise said.
Part of what was so interesting, Kantor told “Marketplace Morning Report” host David Brancaccio, was that Amazon has long seen high turnover as a good thing — and has deliberately encouraged it through various internal policies.
“Bezos really wanted turnover. He was afraid of a stagnant workforce — what he would call a ‘march to mediocrity,’ ” Kantor said.
Weise and Kantor unearthed a web of confusing and confused, often technology-laden human resources systems that monitored worker productivity constantly but repeatedly made major errors, at times mistakenly terminating employees without cause and, at least once, mistakenly failing to terminate someone (who remains at the company today).
“Amazon is so good with packages. When’s the last time you got a mistaken item in an Amazon package? These people are logistical geniuses,” Kantor said. “So if they are so good with packages, how can they treat people so differently?”
Kantor and Weise spoke with Brancaccio about whether Amazon’s uber-high attrition rate is sustainable — and the story of one family caught in the middle of the company’s human resources errors. The following is an edited transcript of their conversation.
David Brancaccio: Among warehouse workers at Amazon, attrition for workers is how high?
Karen Weise: Roughly 150% a year. It’s actually so high that Amazon tracks it weekly. It’s about 3% a week. And this is much higher than the warehousing and retail industry is broadly.
Brancaccio: More people leave Amazon warehouses in a year than if you add up all the employees that are employed at Amazon warehouses?
Weise: Exactly, it’s the equivalent of having to replace the entire workforce every eight months. And so it creates these incredible pressures and demands to constantly be scooping up new people and putting them through the system. And the hiring is completely automated, essentially. You don’t do an interview, you take an online assessment and you show up for work, basically — besides a drug test and some basic forms.
“Amazon’s needs are so voracious right now and the attrition is so high that, as it is now, they need about 5% of the entire American workforce to apply each year.”Karen Weise, technology reporter for The New York Times
Is Amazon’s high turnover sustainable?
Brancaccio: Why could this possibly be the case when every single other business I ever talk to is trying to lower overhead by retaining employees?
Jodi Kantor: Part of what was so interesting about kind of going on this journey of reporting and trying to answer that question is that it turns out that some of it relates back to Jeff Bezos’ ideas, and that some of this turnover is actually by design. Karen interviewed people who helped build and oversee this system over the years. And one of them, a man named David Niekerk, who was an early, very influential Amazon HR person, explained that Bezos really wanted turnover. He was afraid of a stagnant workforce — what he would call a “march to mediocrity.” He envisioned Amazon as like the Marine Corps: You would come for two years, it would be really hard, and then you would move on. So turnover is almost built into the system. If you look at the way they pay, they just don’t expect to keep people for very long. And also, promotion is very limited. Hourly workers get really excited to join Amazon because they feel like they’re going to be part of something very successful. However, it is very hard to fully participate in the success of the company, beyond the good wages and good benefits, because it’s very hard to move up.
Weise: There are structural and technological approaches that Amazon uses and it has built, based on Jeff Bezos’ ideas of how to grow unconstrained, and that enables both this churn and then this lack of promotion opportunities. For example, they use a lot of technology to monitor worker performance and productivity, which means that one manager might oversee 100 hourly associates. So there’s just structurally not that much room for promotion or growth because technology is doing so much of the management. It’s the same thing with the hiring: [they] have this automated hiring process that’s called, internally, “lights-out hiring” because it’s not a human doing the interviews. And that creates this system where you can hire at a mass scale. Someone just said to me, after reading the story, “Nothing makes things more disposable than acquiring them cheaply.” There is this lack of human connection that develops between the associates and management.
“The hourly workforce we are talking about that really powers the system largely consists of Black and Latino workers. And, more and more, we’re hearing frustration from them — not only at the strict monitoring that Amazon is known for, but the idea that they feel like they can’t fully participate in the success of this company.”Jodi Kantor, investigative reporter for The New York Times
So you see this incredible, constant turnover. There’s an open question now — because the turnover is so high, and Amazon’s needs for growth and employment is so large — about whether or not it’s sustainable. In conversations with current and former executives and leaders in Seattle, there is a palpable fear that Amazon will not have enough workers to be able to serve the customer demands that it foresees. And it’s this open question about what do they do about it? The model of this high-churn, mass-management-by-machine approach has brought them so far. But their needs are so voracious right now and this attrition is just so high that, as it is now, they need about 5% of the entire American workforce to apply each year just to stick where they are now. Imagine all the future growth they have: They spent $44 billion in capital investments last year. A huge portion of that is new warehouses, which means [they’re going to need more people] to staff and move through the buildings.
Growing frustration among workers of color
Brancaccio: You can see why they might want to also hire some robots for some of this. But other companies that do a lot of logistics and have big warehouses don’t approach it in quite the same way. Think of Walmart — it has its problems, but they’re always boasting that a lot of their store managers come from the ranks of people who started at lower levels in stores.
Kantor: That’s right. And that’s part of why you see some real frustration rising across the country from Amazon workers, especially Black workers. The story we all followed in Bessemer, Alabama, with watching Black workers organize there — they were ultimately unsuccessful, but their work did lead to a kind of moment of recognition at the company, because the hourly workforce we are talking about that really powers the system largely consists of Black and Latino workers. And, more and more, we’re hearing frustration from them — not only at the strict monitoring that Amazon is known for, but the idea that they feel like they can’t fully participate in the success of this company. Derek Palmer, one of the workers we wrote about who’s now trying to unionize JFK8, which is Amazon’s only fulfillment center in New York City, said, essentially, you do really well [as a warehouse worker] and there’s no reward for that merit.
Brancaccio: What did Amazon tell you about this blockbuster number, 150% attrition rate — an attrition rate you might be able to see even from space? They suggest, what, that maybe you shouldn’t get too caught up in a number?
Weise: They repeated a phrase that “attrition is just one metric and without broader context doesn’t have enough meaning.” But they really didn’t elaborate on that. And they definitely didn’t say that that number was unacceptable. And that was, to me, very interesting and very telling. We spoke with a VP for human resources in the warehouses who said, yes, we want to build careers for people, but we’re also really happy to provide short-term employment for people in the time of need. And we definitely saw that in New York. I mean, we saw people from all different industries, classic New York City industries that collapsed in the pandemic, turn to Amazon. Its wages are solid for an entry-level job in New York City now; it’s about $18 an hour as their minimum wage. And they do have really solid health care. That’s something workers talk about quite a bit. But the challenge is being able to stay in and keep those jobs. ‘
“Amazon has begun recognizing that there needs to be more human in the human resources. But people are pushed into back offices; into apps and chat bots that become extremely frustrating for people to work with. And you’re talking about a million workers that are running through these systems.”Karen Weise
And, yes, we have talked to workers who did just look to it for a couple months of time — they’re about to start school. Jodi interviewed one worker who secretly knew he was a dancer in a Beyoncé video that was about to drop, so he just needed a couple months of work. But we definitely talked to workers who had ambitions and hopes to build a career. And, frankly, some of them would have been really wonderful managers — you can tell, just from talking with them, they have that leadership that you might want — who just washed out of the system for so many different reasons. And so that is sort of this open question, again, of whether or not they can bring that [attrition] down or have the intent to bring that down — and whether Jeff Bezos’ vision of having a short-term workforce is now running head into the labor market being as tight as it is. They’ve raised wages. They’ve limited screening on pot — you can now take marijuana and, not show up to work high, but get hired. And so they definitely need workers to fill this machine.
Kantor: And David, I think you’re asking the right question — is that 150% attrition number a giant, red danger sign? Or is it the secret to Amazon’s domination?
The human cost of HR errors
Brancaccio: Tell me about an Amazon employee that you focus on in some of the reporting. His name is Alberto Castillo. He gets coronavirus early on. And he has terrible physical effects from this.
Kantor: He got really sick. It’s one of the worst coronavirus stories I’ve ever heard. He’s a 42-year-old dad of two kids. Really warm, tight family, immigrants from the Philippines. Loyal Amazon worker, works faithfully for the company for five years, is severely disabled by coronavirus. And he had been working, by the way, mandatory overtime in late March when the virus hit New York City very, very hard. So his wife, Ann, has an incredibly difficult experience with Amazon as her husband is going through this crisis. Now, it’s great that she’s got Amazon’s benefits, those are really solid. But trying to access them was a problem. And her communications with the company just exemplify something we heard again and again, which is, Amazon’s HR systems are very automated. They’re treated, in part, like an engineering process. It can be very difficult to get a human being on the phone.
And so Ann Castillo, while her husband is suffering, runs into these walls of confusion. His disability benefits just suddenly halt for no apparent reason in the middle of this crisis. We found out later it was connected to a much bigger meltdown in Amazon’s employment systems during the coronavirus. And then in September, after she has been trying for months to convey to the company what’s been going on — her contact with the warehouse has been very minimal; she’s reached out to people again and again — they send this notice in the mail saying to Alberto: “We notified your manager and HR about your return to work on Oct. 1, 2020.” Meanwhile, as this is happening, Alberto Castillo is entering hospice care. And so Ann Castillo is incredulous, and she asks this question that becomes kind of the moral center of our story: “Haven’t they kept track of what’s happened to my husband?” And she said that she wanted to ask the company, “Are your workers disposable? Can you just replace them?”
Mistaken terminations and other errors
Brancaccio: You’re describing human resources systems that are more like when you want to call customer service for an also-ran cellphone company. But it’s different if you’re dealing with HR matters where there should be some kind of, people would think, a relationship.
Kantor: Well, and also, Amazon is so good with packages. When’s the last time you got a mistaken item in an Amazon package? These people are logistical geniuses. So if they are so good with packages, how can they treat people so differently?
Weise: Yeah, and here in Seattle in the corporate headquarters, this is a question that people are starting to really worry about. As they say, “This is Amazon. We can achieve anything. Why have we not prioritized this enough?” Both the attrition, but also just the overall approach and management of people. Amazon has begun recognizing that there needs to be more “human” in the human resources. But people are pushed into back offices, into apps and chat bots and things like that that become extremely frustrating for people to work with. And you’re talking about a million workers that are running through these systems.
And some of the stories we heard were Kafkaesque. We spoke with employees at a back office in Costa Rica that were processing leaves, and the employees in Costa Rica would get these panicked calls from warehouse workers in the U.S. who were saying, “I’m on an approved leave. Why is Amazon telling me I’m about to be fired for not showing up for my job?” And that’s because the tech system would not update their attendance systems. So the employees in Costa Rica had to then put in a ticket for a team in India to manually input these systems. And they’re saying, “This is crazy. We are Amazon, one of the top technology companies on the planet, and yet we have this incredibly manual process.” So Amazon is kind of catching up to the technological needs for really managing a workforce that is essential to Amazon’s success. This is what I’m starting to hear in Seattle more and more.
“These are systems that have propelled Amazon to dominance. They have been successful beyond compare. And how many stories in the business world do you really see where a company revisits something that is ultimately very successful for them?”Jodi Kantor
Brancaccio: Didn’t you [speak to] a guy who was just coming back from leave, anxious to get back to work, and he got caught in the electronic system, and he’s essentially told his services are no longer needed?
Kantor: We found a pattern of mistaken terminations during the pandemic. Just as people were depending on these jobs as lifelines, and Amazon is boasting of its job creation numbers, there were systems that were mistakenly terminating people. And also a pattern of job abandonment notices that were sent to people just because they applied for leaves. They were applying for totally regular leaves, they had done nothing irregular and they were sent these messages kind of accusing them of not showing up for work. And that’s because the attendance system does not easily speak to the leave system. And it was kind of shocking the degree to which those job abandonment notices were accepted as a regular business practice. You’d talk to HR people and they’d say, “Oh, yeah, yeah, they got the job abandonment notices, but I was able to go into the system and fix it, and they didn’t get terminated in the end.” Or they would speak about people who actually were terminated, and some HR people would say, “But I was able to go back and reinstate them.” But what nobody can say is how many people slipped through the cracks of this giant system and really did lose their jobs for no reason.
Weise: There was also an example in our story of a woman who was supposed to be fired for, essentially, a behavioral problem; who was told, “You’re no longer allowed to be an Amazon employee, you can never reapply for work.” And then, all of a sudden, her phone alerted her for missing a shift, and she came back to work, and she kept working. And she still works at Amazon today. And it turns out that no one processed her termination properly. They told her she was fired, but in the system it wasn’t there. And so we have now, in the story, someone who was fired erroneously and someone who was supposed to be fired who wasn’t actually fired.
Does Amazon want to change?
Brancaccio: What do you think — is this a moment where Amazon is ready for some introspection on this issue of how it runs its internal processes as opposed to its amazing ability to get a new bicycle headlamp to me on time?
Kantor: The jury’s totally out. On the one hand, while we were reporting this story, Jeff Bezos suddenly declared an ambition to be Earth’s best employer — which felt like a startling concession because, for most of his tenure, he’s been pretty unapologetic about his focus on customers and not employees. But then again, as we know, Jeff Bezos has weeks left in his tenure at the head of this company, and he’s about to blast off into space. So this raises huge questions: Are his successors going to clean this up? And what exactly are they going to do? Because, again, these are systems that have propelled Amazon to dominance. They have been successful beyond compare. And how many stories in the business world do you really see where a company revisits something that is ultimately very successful for them?
Weise: The CFO addressed this with journalists a couple months ago, and I asked, “What does it mean to be Earth’s best employer? Is there any budget being earmarked to that beyond pay raises, which is their traditional approach?” And the CFO said, “You know, we’ve always wanted to be a great employer, we’ve always wanted to have a safe workplace. So Jeff is really just reiterating that, kind of internally more than anything.” And so, to me, that was such a fascinating response, because that did not, to me, suggests a true reckoning. But we’ll see. Again, the labor market is changing so fast. The CFO talked about that, too — they need to step up their game if they can hire. And, traditionally, that’s just been wages, but what we found is that wages were not enough to keep people there.
Employment growth amazon
The Staggering Growth of Amazon's Workforce
by Felix Richter,
While many companies were forced to cut jobs in face of the COVID-19 pandemic, Amazon went on an unprecedented hiring spree in 2020. According to its latest earnings release, the e-commerce behemoth created 500,000 new jobs in 2020, adding to its already sizeable workforce.
With roughly 1.3 million employees across the globe, Amazon is only the second U.S. company to employ more than a million people (not counting McDonald's franchise employees). And while there's no end in sight to its growth, the company will have a hard time grabbing the number 1 spot anytime soon: retail giant Walmart currently employs 2.2 million people around the world.
This chart illustrates the rapid growth of Amazon's global workforce.
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Pushed by Pandemic, Amazon Goes on a Hiring Spree Without Equal
The company has added 427,300 employees in 10 months, bringing its global work force to more than 1.2 million.
SEATTLE — Amazon has embarked on an extraordinary hiring binge this year, vacuuming up an average of 1,400 new workers a day and solidifying its power as online shopping becomes more entrenched in the coronavirus pandemic.
The hiring has taken place at Amazon’s headquarters in Seattle, at its hundreds of warehouses in rural communities and suburbs, and in countries such as India and Italy. Amazon added 427,300 employees between January and October, pushing its work force to more than 1.2 million people globally, up more than 50 percent from a year ago. Its number of workers now approaches the entire population of Dallas.
The spree has accelerated since the onset of the pandemic, which has turbocharged Amazon’s business and made it a winner of the crisis. Starting in July, the company brought on about 350,000 employees, or 2,800 a day. Most have been warehouse workers, but Amazon has also hired software engineers and hardware specialists to power enterprises such as cloud computing, streaming entertainment and devices, which have boomed in the pandemic.
The scale of hiring is even larger than it may seem because the numbers do not account for employee churn, nor do they include the 100,000 temporary workers who have been recruited for the holiday shopping season. They also do not include what internal documents show as roughly 500,000 delivery drivers, who are contractors and not direct Amazon employees.
Other retailers — both with physical stores and online ones —competed with Amazon on Black Friday and were strategizing on how to make the most of the busy end-of-year sales period, which has been upended by the pandemic. Many encouraged curbside pickup and put social distancing measures in place on Friday, but they saw light foot traffic. Amazon has the largest share of e-commerce, where sales are expected to grow by as much as 30 percent over last year’s holiday season, according to the National Retail Federation.
Amazon’s rapid employee growth is unrivaled in the history of corporate America. It far outstrips the 230,000 employees that Walmart, the largest private employer with more than 2.2 million workers, added in a single year two decades ago. The closest comparisons are the hiring that entire industries carried out in wartime, such as shipbuilding during the early years of World War II or home building after soldiers returned, economists and corporate historians said.
“It’s hiring like mad,” Nelson Lichtenstein, a labor historian at the University of California, Santa Barbara, said of Amazon. “No American company has hired so many workers so quickly.”
Even for a company that regularly sets new superlatives, Amazon’s employee growth stands out as a stark illustration of its might. At this pace, it is on track to surpass Walmart within two years to become the world’s largest private employer.
Its expansion is unfolding as lawmakers and regulators in Washington and Europe have sounded the alarm over tech power. This month, European Union regulators brought antitrust charges against Amazon, accusing it of unfairly using its size and access to data to harm smaller merchants in its marketplace. Amazon has said merchants are thriving on its site, with their share of sales growing in the pandemic. The Federal Trade Commission is also examining the company, with President-elect Joseph R. Biden Jr. expected to continue scrutinizing the tech giants.
“We are turning into Amazon nation,” said Margaret O’Mara, a history professor at the University of Washington and a contributing New York Times opinion writer.
Having employees in nearly every state gives Amazon, which has warehouses around the country to be closer to customers, potentially outsize political leverage, Ms. O’Mara said. She added that history has shown there are risks when a region or country becomes too dependent on any one employer, though she said Amazon had not reached that point.
Amazon has portrayed its hiring as a boon for workers laid low by the pandemic-induced recession, as unemployment has soared and as restaurants, airlines and other businesses suffer.
“Offering jobs with industry-leading pay and great health care, including to entry-level and frontline employees, is even more meaningful in a time like this,” Jeff Bezos, Amazon’s founder and chief executive, said last month when the company reported blockbuster financial results.
Some government policies have helped Amazon’s recent growth. In March, a taxpayer-funded $2 trillion stimulus package allowed local governments to shut down traditional retail stores to reduce the spread of the virus. As the stores closed, demand for items through Amazon rose — and it hired.
Adding so many new workers so fast in a pandemic has been a herculean task. Many workers feared catching the coronavirus in warehouses, so Amazon rolled out a fleet of safety measures to address Covid-19. And it revved up its hiring machine, which relies on technology and traditional recruitment.
That includes promoting its training, benefits and pay. Of its 810,000 workers who are in the United States, about 85 percent are frontline employees in warehouses and operations who earn a minimum of $15 an hour. That is higher than traditional retail work, where an average sales worker makes $13.19 an hour, but lower than typical warehousing jobs. On Thursday, Amazon said it would pay bonuses of $300 for full-time employees and $150 for part-time employees.
To get the word out, Amazon used staffing agencies and advertised on television, billboards and in mailboxes by highlighting sign-on bonuses of up to $3,000 and its precautions against Covid-19. In one recent TV spot, an Amazon employee wearing a mask said, “Safety, safety, safety!”
In many places, the hiring has come easily because Amazon is one of the few employers with open jobs. In the week leading up to Sept. 16, which the company billed as “Career Day,” it said it received more than 384,000 job applications in the United States and Canada, or 38 a minute.
“It is happening in the context of an unprecedented loss of jobs elsewhere in the economy,” said Ellora Derenoncourt, an assistant professor at University of California, Berkeley, who has studied Amazon’s minimum wage.
Amazon is not the only beneficiary of how the pandemic has pushed people toward buying online instead of in stores. Walmart has added 180,000 employees in the United States since March, and its online sales rose 79 percent in the latest quarter. Target’s e-commerce sales similarly soared 155 percent.
In that sense, this downturn has differed from past recessions, when usually all industries slowed, said Jed Kolko, chief economist at Indeed, the online jobs site. “This period has been partly about a recession but also about a pretty dramatic shift of economic activity from some sectors to others,” he said.
Just two years ago, Amazon’s work force numbered fewer than 650,000 people. At the time, the company hit the brakes on hiring to focus more on profits. The hiring pace picked back up a year ago, after it introduced one-day shipping in the United States, an enormous effort that required more warehouses and more workers to pick, pack and sort packages.
When the coronavirus hit the United States in March, online shopping condensed years of expansion into a few months. From April to June, Amazon said, it sold 57 percent more items than a year earlier.
That spurred its first pandemic hiring wave of about 175,000 temporary workers. Many were hired to replace employees who had taken advantage of an unlimited unpaid time off policy at the outset of the pandemic. To attract new employees, Amazon offered workers an extra $2 an hour and increased overtime pay. It said the extra wages were not “hazard pay,” but incentives.
Amazon had the hiring infrastructure in place to grow fast, said Ardine Williams, the vice president for work force development. As Covid-19 kept people like her elderly parents sheltering in place for safety, she said, consumers turned to e-commerce, accelerating the need to hire more.
“Some of that growth has clearly been planned,” she said. “I think that the head count ramp, though, has really been fueled by customer demand.”
Over the summer, Amazon converted most of the 175,000 temporary workers to permanent employees and ended the extra pay bumps for all workers. Since then, it has continued with waves of hiring.
The company has also almost tripled the number of U.S. warehouses used for last-mile deliveries this year, said Marc Wulfraat, founder of the logistics consulting firm MWPVL International, who tracks Amazon’s operations. The delivery drivers are usually contractors, so Amazon does not disclose their numbers in regulatory filings.
“They have built their own UPS in the last several years,” Mr. Wulfraat said. “This pace of change has never been seen before.”
Ms. Williams said Amazon also built relationships with companies that were reducing staff, such as Uber, American Airlines and Marriott, to promote its hiring.
“We dedicated a group that did nothing but connect with organizations who were furloughing people, whether it was temporary or permanent,” she said. “That allowed us to take a skilled, quality work force, and very quickly and easily move them into opportunities that were appropriate at Amazon.”
The effort has been aided by 1,000 technology workers who create software for Amazon’s human resources teams, many building portals and algorithms that automate hiring, she said. Prospective employees can find jobs, apply and be hired entirely online, without talking to a single person.
To grow so much, Amazon also needs to think long term, Ms. Williams said. As a result, she said, the company was already working with preschools to establish the foundation of tech education, so that “as our hiring demand unfolds over the next 10 years, that pipeline is there and ready.”
Michael Corkery contributed reporting from New York.
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Two charts show Amazon's explosive growth as the tech giant prepares to add 133,000 workers amid record online sales
- Amazon is hiring 133,000 new full-time and part-time employees in the United States and Canada.
- The coronavirus pandemic — which is forcing consumers to rely on e-commerce fulfillment — has fueled Amazon's hiring spree.
- However, the company's biggest confirmed workforce increase occurred between 2016 and 2017.
- That year, the e-commerce giant added 224,600 new full-time and part-time roles.
- Visit Business Insider's homepage for more stories.
Amazon is going on a hiring spree that will push its global headcount to new heights.
The company has added 175,000 temporary positions since March and plans to add more than 133,000 employees to its ranks over the next several months. These positions are in addition to the 876,000 permanent employees that Amazon employed as of July, and could push Amazon's global headcount — including permanent and temporary hires — up to roughly 1.2 million workers.
Amazon's recent hiring surge has been driven by the exponential growth in online sales amid the pandemic. But before the pandemic, the company was already growing at a quip. Its permanent workforce grew a whopping 34% year-over-year, the company said in July.
In July, Amazon CEO Jeff Bezos confirmed that the company directly employed around a million people, according to MarketWatch. That number includes 1750,000 temporary seasonal workers hired during the pandemic. When it comes to Amazon's physical footprint, the company also set to convert Ohio's infamous dead Rolling Acres Mall to a robotics sortable facility employing 1,500 workers, according to the Beacon Journal.
But Amazon's recent hiring spree is not the largest confirmed increase to the company's workforce to date. The company saw its biggest permanent workforce spike between 2016 and 2017, when 224,600 new full-time and part-time workers came onboard.
Amazon's headcount of 876,000 full-time and part-time workers does not including seasonal employees. An Amazon spokesperson told Business Insider that the company amends its "global headcount numbers once a quarter during our earning filing," meaning that the next update will occur in October.
Amazon has hired thousands of new employees every year since 2009. Starting in 2017, the company began hosting Amazon Job Day events around the country in order to better staff its growing fleet of warehouses. The company's Securities Exchange Commission filings also note that Amazon does not count seasonal employees or independent contractors in its workforce estimates.
It's unclear whether or not 2020 will prove to be Amazon's biggest year for hiring yet, but the e-commerce giant is certainly on the way to significantly expanding its workforce once again.