Amazon is worried about running out of people to hire — Quartz

Amazon, the world’s largest private employer after Walmart, fears it will run out of workers in US warehouses by 2024, according to internal research obtained by Recode.

“If we continue business as usual, Amazon will exhaust the supply of labor available in the US network by 2024,” the unidentified authors of the research note wrote. Quartz was unable to independently verify the contents of this document, which was reportedly published in 2021. An Amazon spokesperson downplayed its implications.

“There are many draft documents written on many topics in the business that are used to test hypotheses and examine different possible scenarios, but which are not then escalated or used to make decisions. He was one of them. This does not represent the real situation, and we continue to hire well in Phoenix, the Inland Empire and across the country,” spokeswoman Rena Lunak told Quartz.

Amazon’s retail business depends on a global network of hundreds of fulfillment centers to fulfill orders. The company is expanding outside the United States, but still depends on its home country for around 70% of its retail sales, according to its latest quarterly financial report (pdf). To keep up with demand and maintain its dominant market position, Amazon will need to address its warehouse staffing problem amid a broader reshuffle in the U.S. labor market.

Amazon needs workers

Amazon’s memo made its dire predictions not of the entire U.S. workforce, but of a specific group of workers the company deems eligible or likely to work in its fulfillment centers, on the demographic and location database. In some markets, like Phoenix, Arizona, the pressures are immediate: Amazon needed to exhaust this potential workforce by the end of 2021. Recode reports that the company has relaxed enforcement of policies at the location of work in its Phoenix warehouses to reduce turnover.

Amazon is also seeing backlash from employees who stick around. Its workers attempted to unionize at several warehouses in the United States, and in April they were successful at a Staten Island warehouse in New York. The company has tried to roll back organizing efforts, but even without them, warehouse workers are increasingly talking about things like insufficient bathroom breaks, unsafe working conditions and a culture of surveillance at the facilities. from Amazon.

In a survey of 31,000 former warehouse workers, referenced in the memo, employees reported improved working conditions at Amazon competitors FedEx and Walmart. According to Recode, the survey found that employees who left Amazon to join another company “rate Amazon significantly lower on skills or interests, job demands, shift length, and shift schedule”.

To solve its warehouse labor problem, Amazon may really need to address these issues, while bringing in new talent, fending off competition, and improving automated systems at its sites.

Amazon’s post-pandemic pickle

When covid-19 hit, many retailers closed or limited in-person shopping. Amazon thrived. The company’s profit reached $8.1 billion in the first three quarters of 2021, up 220% year-over-year. Today, Amazon has about 200 million people who pay $139 a year for Amazon Prime, which has also acclimated its customers to same-day shipping.

All of this e-commerce demand has led to a surge in demand for fulfillment staff: Amazon’s global workforce has grown by nearly 75% during the pandemic. In the last quarter of 2021, a peak holiday shopping season, Amazon fell short of its goal of hiring more than 150,000 people, Chief Financial Officer Brian Olsavsky said on an earnings call in February. But in the second half, Amazon hired some 270,000 new employees.

To keep more workers coming and improve churn levels that can exceed 100%, Amazon raised the minimum hourly wage to $18 an hour and even dropped marijuana testing for potential applicants. But it’s clear that even Amazon knows it’s getting harder and harder to find people who plan to work in Amazon Fulfillment.

This article has been updated with a comment from an Amazon spokesperson.

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