Amazon may have massively expanded the size of its robot workforce in the past year, but that doesn’t mean it’s not hiring human beings, too. On Thursday, the e-commerce giant announced that it was planning to add more than 100,000 new jobs in the US over the next 18 months, growing its workforce by over 50 percent to more than 280,000 employees, Reuters reports:
Amazon is spending heavily on new warehouses so it can stock goods closer to customers and fulfill orders quickly and cheaply. The new hires, from Florida to Texas to California, will be key to the company’s promise of two-day shipping to members of its Amazon Prime shopping club, which has given it an edge over rivals. A BGC Partners analyst, Colin Gillis, said hiring was expected. “Amazon continues to meaningfully grow above e-commerce rates and continues to take share from traditional retailers,” he said.
The e-commerce giant said in October it would add 26 fulfillment centers in 2016, mostly in North America. More are under construction. The new jobs will extend beyond Amazon’s Seattle headquarters to communities across the United States, CEO Jeff Bezos said in the release. Amazon did not break down what share of jobs would go to corporate roles versus fulfillment work.
At the same time, Amazon’s wholesale disruption of the way Americans shop has led to a great deal of “creative destruction,” hurting brick-and-mortar retail and now threatening to upend the traditional grocery store as well. While these innovations may be a net positive for the economy, the New York Times points out that many workers will inevitably lose out in the change:
The company’s hiring plans are certainly good news. But to understand the forces roiling the American economy, it’s key to remember that online retailing has destroyed many times that number of positions at malls and shopping centers across America. That’s not necessarily a bad thing over the long term. Greater productivity is essential for economic growth, and, according to the company, the 100,000 figure includes highly paid engineers and software developers in addition to hourly warehouse workers. But for people caught on the wrong side of that transition in the short term, it’s the equivalent of an economic hurricane.
“There are huge benefits to consumers from Amazon,” said Lawrence Katz, an economics professor at Harvard who studies labor and technological change. “But the workers they are hiring aren’t the same ones being laid off.”
Indeed, this is a point that often gets lost in the debate over how many jobs new technologies will create or destroy: The employees whose jobs are being lost can’t just step right into the new ones being created, at least not without being retrained.
In any case, Amazon’s planned expansion to 280,000 employees will make it one of the 20 largest employers in the US. Indeed, even before Thursday’s announcement, Amazon had already reached a major milestone in the history of US companies, as the Progressive Policy Institute explains:
General Motors reached 300,000 employees in 1941, 32 years after its 1909 founding. American Telephone & Telegraph hit the same milestone in 1926, 27 years after its 1899 absorption of the local Bell systems. And Walmart went over 300,000 associates in its 1991 fiscal year, its 21st year as a public company.
But in 2016, Amazon became the fastest American company to reach 300,000 [total] workers, hitting that mark in its 20th year as a public company. This figure, which does not include contractors or temporary workers, represents an average employment growth rate of roughly 30% per year. That’s an amazing growth rate.
But Amazon is not alone. In fact, tech giants such as Google, Apple, Facebook and Microsoft are adding jobs as fast or faster than the great job-producing companies of the past, like GM, AT&T, Walmart, IBM, GE, US Steel, and Bethlehem Steel.
Amazon’s size and growth has also made it one of the most important actors in the American labor market. In that context, the company’s workforce will likely become very important to unions, as Hamilton Nolan points out at the Concourse:
Amazon, a company worth $386 billion, is significantly more valuable than Walmart, Target, Best Buy, Macy’s, Nordstrom, Sears, Kohl’s, and JC Penney put together. Amazon is the future of American retail. That means it is the future of American labor.
Furthermore, the Seattle Times‘ Ángel González argues that the way Amazon promoted Thursday’s news reflects a likely shift in strategy related to the incoming US presidency of Donald Trump:
[T]he disclosure of its massive, near-term full-time job projections in the U.S. is novel for the e-commerce juggernaut. It seems to fit within the context in which President-elect Donald Trump lambastes, often via Twitter, companies that take jobs out of the U.S. and praises those companies that create them. …
Thursday’s announcement has more in common with how Amazon touts its job-creating potential in Europe, a region where the company is dealing with tax and antitrust investigations, suspicious governments and hostile unions. In early 2016, Amazon trumpeted its “new job creation record” of 10,000 permanent new jobs in the Old World the previous year, promising “several thousand” more across a wide range of operations.
Amazon’s louder tune underscores how the new U.S. administration, led by a boss given to mercurial blasts, will bring new political-risk challenges to corporate America.
Bloomberg has more on the Trump angle, passing along financial analyst Ivan Feinseth’s opinion that “the timing certainly makes Trump look good,” as well as some context on the somewhat acrimonious history between the president-elect and Amazon’s founder and CEO, Jeff Bezos:
Bezos and Trump publicly exchanged hostilities during the presidential campaign, with Bezos joking that he would send Trump to space on one of his rockets and Trump saying that Amazon has a “huge” antitrust problem, and accusing Bezos of using the Washington Post to influence politicians to help Amazon on taxes. After Trump’s victory, Bezos tweeted: “I for one give him my most open mind.”
Bezos was among a group of leading technology industry executives who met with Trump last month in Manhattan to discuss points of concern. Jobs, immigration and China topped the agenda. Since then, several companies — from IBM to Ford and Alibaba — have publicly announced hiring sprees, though some of them were re-polishing previously announced intentions. In a call with reporters on Thursday Trump spokesman Sean Spicer said his boss was happy to play a part in Amazon’s decision.
However, the analyst, Feinseth, also insisted to Bloomberg that the news not just be viewed through a political lens, noting that, “You have a good company hiring people in an area where a lot of tech companies tend to be outsourcing people. So it’s very positive, political or not.”