Recode By Jason Del Rey 6/17/2022
Unions might not be the tech giant’s biggest labor threat.Amazon is facing a looming crisis: It could run out of people to hire in its US warehouses by 2024, according to leaked Amazon internal research from mid-2021 that Recode reviewed. If that happens, the online retailer’s service quality and growth plans could be at risk, and its e-commerce dominance along with it.
Raising wages and increasing warehouse automation are two of the six “levers” Amazon could pull to delay this labor crisis by a few years, but only a series of sweeping changes to how the company does business and manages its employees will significantly alter the timeline, Amazon staff predicted.
“If we continue business as usual, Amazon will deplete the available labor supply in the US network by 2024,” the research, which hasn’t previously been reported, says.
The report warned that Amazon’s labor crisis was especially imminent in a few locales, with internal models showing that the company was expected to exhaust its entire available labor pool in the Phoenix, Arizona, metro area by the end of 2021, and in the Inland Empire region of California, roughly 60 miles east of Los Angeles, by the end of 2022. Amazon’s internal report calculated the available pool of workers based on characteristics like income levels and a household’s proximity to current or planned Amazon facilities; the pool does not include the entire US adult population.
Amazon spokesperson Rena Lunak didn’t refute the contents of the internal report Recode obtained but declined to comment on it.
The research provides a rare glimpse into the staffing challenges that Amazon is now facing behind its slick veil of one-click online shopping and same-day Prime delivery. And it pointedly reveals how much of Amazon’s business success and its longtime position as a darling of Wall Street investors is dependent on its workforce of more than 1 million people who pick, pack, and ship its customers’ orders nearly 24/7.
The leaked internal findings also serve as a cautionary tale for other employers who seek to emulate the Amazon Way of management, which emphasizes worker productivity over just about everything else and churns through the equivalent of its entire front-line workforce year after year.
In the past, that churn wasn’t a problem for Amazon — it was even desirable at some points. Amazon founder and former CEO Jeff Bezos saw his warehouse workforce as necessary but replaceable, and feared that workers who remained at the company too long would turn complacent or, worse, disgruntled, according to reporting by the New York Times. But now, as the internal report Recode reviewed shows, some inside Amazon are realizing that strategy won’t work much longer, especially if leaders truly want to transform it into “Earth’s best employer,” as Bezos proclaimed in 2021.
More:
https://www.vox.com/recode/23170900/leaked-amazon-memo-warehouses-hiring-shortage
