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Jun 23 - Leaked Amazon memo warns the company is running out of people to hire



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 7 days ago '06        #1
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Jun 23 - Leaked Amazon memo warns the company is running out of people to hire
 

 
Unions might not be the tech giant’s biggest labor threat.



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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.

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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.

To be sure, part of Amazon’s turnover issue relates to how some employees view working in a warehouse as a brief pit stop on the way to better things. But some workers have long complained of stresses unique to Amazon’s workplace, from the pace and repetition of the labor to the unrelenting computerized surveillance of workers’ every move to comparatively high injury rates. In a company survey of 31,000 workers who left Amazon that was referenced in the report, some former Amazon workers say it’s worse to work at Amazon than some big-name competitors like Walmart or FedEx. In that survey, those who joined another employer soon after leaving the tech giant “rated Amazon significantly worse on work fitting skills or interests, demands of the work, shift length and shift schedule.”

With traditional competitors ramping up their investments in e-commerce warehouses, Amazon is no longer a slam-dunk top choice for those seeking work in these types of facilities and the starting minimum wage that comes along with it. And that dynamic is already playing out in some parts of the country.

Danger zones
In the Inland Empire region of California, for example, Amazon may cycle through every worker who’d be interested in applying for a warehouse job by the end of 2022, the internal report warned. One of the reasons is that Amazon is increasingly finding itself in a bidding war for workers with rivals in the area, which is a key logistics region because it is within a two-hour drive of 20 million potential customers and two of the largest container ports in the US.

“We are hearing a lot of [Amazon] workers say, ‘I can just go across the street to Target or Walmart,’” said Sheheryar Kaoosji, co-executive director of an Inland Empire nonprofit called the Warehouse Worker Resource Center. Kaoosji added that Walmart is offering some workers with past warehouse experience as much as $25 an hour. An Amazon executive told Reuters in late 2021 that the company was bumping the average starting wage for new hires in the US to more than $18 an hour, attributing the decision to intense competition among employers. He also said Amazon had increased hiring bonuses to as much as $3,000 in some geographies.

And internal forecasts showed the situation was dire in Phoenix, Arizona, with Amazon projected to exhaust its entire potential workforce by the end of 2021. The Phoenix metro area has been a key market for Amazon since it opened its first warehouse there in 2007. The company currently operates more than 20 facilities in the region. But attrition at Amazon’s facilities in the area grew from 128 percent in 2019 to 205 percent in 2020, as the pandemic upended labor markets and online shopping boomed, putting pressure on fulfillment center employees.


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As a result, Amazon seemed to have reversed, or stopped enforcing, some workplace policies at Phoenix warehouses amid the labor shortage, according to a former manager.

“They were so concerned about attrition and losing people that they rolled back all the policies that us as managers had to enforce,” Michael Garrigan, a former entry-level manager at Amazon warehouses in Phoenix from 2020 to early 2022, told Recode. “There was a joke among the … managers that it didn’t matter what [workers] got written up for because we knew HR was gonna exempt it. It was almost impossible to get fired as a worker.”

Lunak, the Amazon spokesperson, declined to comment on Garrigan’s claims.

The internal research also identified the regions surrounding Memphis, Tennessee, and Wilmington, Delaware, as areas where Amazon was on the cusp of exhausting local warehouse labor availability. Amazon’s models used for this internal research were 94 percent accurate in predicting the US geographies where Amazon was significantly understaffed in the lead-up to the Amazon Prime Day shopping event in June 2021, the report noted, which contributed to delivery delays for customers in those markets. The warnings about Amazon’s labor supply shortages indicate that in at least some markets, Amazon shipments could face more severe delays in the future.

Despite its looming labor crisis, Amazon temporarily overcorrected in some markets, going from understaffed to overstaffed. Amazon’s chief financial officer had previously said that the company was understaffed by 10,000 employees during the end of 2021, before the omicron Covid-19 variant had wreaked havoc on much of the US. But in April, the company revealed that it was actually overstaffed in some areas in early 2022 as the first wave of omicron subsided and employees returning from sick leave worked alongside new hires who had been recruited to backfill their roles.

Amazon spokespeople have said that the company will count on natural attrition rates to solve much of the current overstaffing problem, and the Wall Street Journal reported on Thursday that a top company official pitched a plan internally to “[thin] out its worker base through attrition.” It’s unclear where exactly Amazon is overstaffed and how long it will take to rightsize its workforce, but it seems unlikely that it is thinning staff in competitive locales like Phoenix and the Inland Empire where it had already exhausted much of the labor pool. It’s also unclear how the current economic climate will impact consumer spending and, relatedly, Amazon’s hiring needs.

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For better or worse, the approach of reducing the temporary overstaffing issue through attrition should work for Amazon because it has long churned through its workers at a rapid clip. Amazon’s attrition rates were 123 percent in 2019 before jumping to 159 percent in 2020, according to internal data in the report Recode obtained, while turnover rates across the US transportation and warehouse sectors were much lower: 46 percent and 59 percent respectively in 2019 and 2020, according to Bureau of Labor Statistics estimates.

Turnover in the US retail industry was slightly higher than that — 58 percent and nearly 70 percent respectively in 2019 and 2020 — but still only about half as bad as Amazon’s. The high rates of attrition “made some [Amazon] executives worry about running out of workers across America,” the New York Times reported in 2021, though the article did not include specific timelines.

The leaked report viewed by Recode reads like an attempted wake-up call — along with potential solutions to avert the crisis — for some company leaders who long exhibited a nonchalant attitude toward employee attrition.

No silver bullet
Amazon has a variety of potential solutions for its people problem, but they will require the company to shift its mindset and overcome practical or logistical challenges.

On the surface, simply employing its current workers for longer would be a big help. The turnover rate disparity between Amazon and industry averages shows there is ample opportunity for the company to keep employees longer and delay the arrival of the day when it won’t have workers left to recruit. This is not some unsolvable, mysterious problem; the BLS stats show that plenty of companies retain workers much better than Amazon does. In fact, Amazon’s own data shows that nearly 90 percent of new workers say they want to stay at their jobs for at least six months. If Amazon could bring attrition rates down to its 2019 levels, which were still above 100 percent, the company would gain three more years of hiring runway, according to the internal projections.



image

In other parts of the country, though, where labor shortages aren’t yet a certainty, remnants of Amazon’s longtime aggressive termination practices persist. It’s not uncommon for some of Amazon’s automated computer systems to automatically fire employees for a variety of minor infractions, without exception. Jose Pagan, a former Amazon employee at a warehouse in Bronx, New York, says he got the automated ax recently despite nothing but positive feedback from his managers.

Pagan began working at the Amazon delivery hub in October and, within two months, had been promoted to a role on the safety committee for the facility. The new role didn’t come with a pay raise, and is on top of a worker’s core tasks, but Pagan saw it as a stepping stone to an official promotion. But in April, Pagan told Recode, he took two days off to have an infected tooth looked at and ultimately removed.

The problem, he said, was that he only had seven hours of unpaid time off but ended up missing 20 hours of work; he had enough paid vacation time to cover the absence, but he said the company did not pull from that separate bank of days because Pagan would have had to apply for vacation time in advance. Pagan said he also had a doctor’s note but was told the company did not need to accept it as an excuse, even though he had been excused from work with a doctor’s note previously. He said he worked for another full week without issue, until he showed up one night for his overnight shift and his badge no longer worked. He was eventually told he had been terminated.

An HR manager told Pagan that there was nothing he could do about the termination but that Pagan should reapply for a job at the company in three months, per Amazon policy.

“We would love you back in 90 days,” Pagan says the HR staff member told him. In the meantime, Pagan should “do some GrubHub or Uber,” the HR employee said.

“I find the whole situation crazy,” said the 35-year-old Pagan, who was supporting his wife and daughter on his Amazon income. “They’re gonna lose a good worker for nothing.”

Lunak, the Amazon spokesperson, said the company is looking into Pagan’s case.

Besides changing termination or retention policies, increasing pay is another obvious lever that Amazon could pull to expand its labor pool. (All of these are things that workers calling for unionization have demanded from the company.) The report predicted that for every dollar Amazon bumps up its minimum wage, it adds 7 percent more workers to its potential hiring pool. If Amazon were to do a little better, and raise its hourly minimum by just $1.50, that too would expand its pool of potential workers enough to extend its hiring ability in the US by three years.


visit this link https://www.vox.com/recod .. source=twitter
+3   



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39 comments
 

 7 days ago '10        #2
lltreyll 
Props total: 9197 9 K  Slaps total: 2671 2 K
I remember when my uncle mentioned that he knew the guy hiring at the brand new Amazon Hub that just opened near where I used to live. They were hiring employees to sort and deliver.. At that point I had already been to that Amazon Hub and did Prime deliveries as a contractor. Out of curiosity my uncle got the guy on the phone and I asked him what the wages were per hour. If I remember right he said $18 to start. Meanwhile I already was able to make more by being an Amazon independent contract delivery driver instead of becoming a full on Amazon employee. Especially if I didn't even bother with that Hub and just did Amazon Whole Food deliveries where I was able to make about $80 to sometimes over $100 for a 2 to 3 hour open shift. So I said fu*k becoming an Amazon employee.

I also remember occasionally running into Amazon DSP drivers that went the employee route at that same hub, and I made sure to ask them if they knew how much could be made by doing contract work through Amazon instead of becoming an employee...Every one of them were shocked, and had no idea.

But there are decent benefits by becoming an Amazon employee, and it would be a consistent wage instead of how inconsistent work blocks would be as a contractor. Delivering all the random things people order through Amazon is incredibly rough work though. I remember how inaccurate the GPS was for contractors with Prime Hub deliveries, the hassle of not having keys to apartment buildings, and just how damn many packages there were. It wouldn't be any different if someone went the employee route. fu*k all that. I don't care if they supply the company vehicle or that there are benefits and an ability to do it full time. It paid less than being a contractor, and the work was completely fu*kin exhausting....I couldn't imagine doing that as a full time job, because you're gaurenteed to burn out quick. And that's just the Amazon driver part of things. I don't think I want to know what bullsh*t warehouse workers and sh*t have to deal with. No thanks.
+14   

 7 days ago '17        #3
Bscot1 
Props total: 6328 6 K  Slaps total: 373 373
Just a modern day plantation

+27   

 7 days ago '10        #4
Blue  topics gone triple plat - Number 1 spot x2
Props total: 10233 10 K  Slaps total: 671 671
I went from a boy to a man in 1 week stocking trucks
I remember it like yesterday boxes of Wrangler jeans as far as the eye could see.

I knew I would never finish all the boxes with no end in sight I cried inside knowing that even when my shift is over those boxes still coming piling up waiting for my black a*s in the morning


Last edited by Blue; 06-23-2022 at 06:21 PM..
+48   

 7 days ago '20        #5
Xiox  topics gone triple plat - Number 1 spot x1
Props total: 63136 63 K  Slaps total: 11582 11 K
They will lobby for h1b visa workers because they are to big to fail
+8   

 6 days ago '19        #6
TDK 
Props total: 102 102  Slaps total: 2 2
 lltreyll said
I remember when my uncle mentioned that he knew the guy hiring at the brand new Amazon Hub that just opened near where I used to live. They were hiring employees to sort and deliver.. At that point I had already been to that Amazon Hub and did Prime deliveries as a contractor. Out of curiosity my uncle got the guy on the phone and I asked him what the wages were per hour. If I remember right he said $18 to start. Meanwhile I already was able to make more by being an Amazon independent contract delivery driver instead of becoming a full on Amazon employee. Especially if I didn't even bother with that Hub and just did Amazon Whole Food deliveries where I was able to make about $80 to sometimes over $100 for a 2 to 3 hour open shift. So I said fu*k becoming an Amazon employee.

I also remember occasionally running into Amazon DSP drivers that went the employee route at that same hub, and I made sure to ask them if they knew how much could be made by doing contract work through Amazon instead of becoming an employee...Every one of them were shocked, and had no idea.

But there are decent benefits by becoming an Amazon employee, and it would be a consistent wage instead of how inconsistent work blocks would be as a contractor. Delivering all the random things people order through Amazon is incredibly rough work though. I remember how inaccurate the GPS was for contractors with Prime Hub deliveries, the hassle of not having keys to apartment buildings, and just how damn many packages there were. It wouldn't be any different if someone went the employee route. fu*k all that. I don't care if they supply the company vehicle or that there are benefits and an ability to do it full time. It paid less than being a contractor, and the work was completely fu*kin exhausting....I couldn't imagine doing that as a full time job, because you're gaurenteed to burn out quick. And that's just the Amazon driver part of things. I don't think I want to know what bullsh*t warehouse workers and sh*t have to deal with. No thanks.
Dawg! Everything you mentioned is factual. I’m currently delivering for these fu*ks lol (well my dsp) and it’s exhausting af. Im burnt out. I’m collecting my check tomorrow and I’m out. Done with that sh*t. It’s for the birds G.
+13   

 6 days ago '18        #7
Crisco  topics gone triple plat - Number 1 spot x1
Props total: 7002 7 K  Slaps total: 999 999
I love reading about how bad working at Amazon is from mother fu*kers who never worked there.
+5   

 6 days ago '10        #8
Rick Ross 
Props total: 22264 22 K  Slaps total: 1213 1 K
 TDK said
Dawg! Everything you mentioned is factual. I’m currently delivering for these fu*ks lol (well my dsp) and it’s exhausting af. Im burnt out. I’m collecting my check tomorrow and I’m out. Done with that sh*t. It’s for the birds G.



those pieces of fu*king trash
+23   

 6 days ago '18        #9
Arroz con Toto 
Props total: 5827 5 K  Slaps total: 1052 1 K
Them Drones and Robots will be coming thru quick keep complaining about wrapping and delivering!


+19   

 6 days ago '19        #10
TDK 
Props total: 102 102  Slaps total: 2 2
 Rick Ross said



those pieces of fu*king trash

I feel yo pain bruh, trust me


Mine looked like that yesterday. Don’t let it be around the holidays, van literally stacked from top to bottom, front to back; boxes/packages covering literally every sq foot of the van completely, sh*ts ridiculous.
+10   

 6 days ago '19        #11
TDK 
Props total: 102 102  Slaps total: 2 2
 Arroz con Toto said
Them Drones and Robots will be coming thru quick keep complaining about wrapping and delivering!


I ain’t tripping. I’m an electrician too. Somebody gotta work on the robots and machines right

+7   

 6 days ago '18        #12
Arroz con Toto 
Props total: 5827 5 K  Slaps total: 1052 1 K
 TDK said
I ain’t tripping. I’m an electrician too. Somebody gotta work on the robots and machines right

True Story. And yall Electricians be over charging up the Azz too!


+2   

 6 days ago '10        #13
Rick Ross 
Props total: 22264 22 K  Slaps total: 1213 1 K
 TDK said
I feel yo pain bruh, trust me


Mine looked like that yesterday. Don’t let it be around the holidays, van literally stacked from top to bottom, front to back; boxes/packages covering literally every sq foot of the van completely, sh*ts ridiculous.
you forgot to mention, if you bust your a*s and get done early, they make you go take packages from the slow mf's
+10   

 6 days ago '17        #14
becoolhomie2  topics gone triple plat - Number 1 spot x15
Props total: 20949 20 K  Slaps total: 7242 7 K
Gonna have to give felons a chance lol
+12   

 6 days ago '19        #15
TDK 
Props total: 102 102  Slaps total: 2 2
 Rick Ross said
you forgot to mention, if you bust your a*s and get done early, they make you go take packages from the slow mf's
You right! The dumbest sh*t ever!!!!! Makes absolutely no sense at all. Wish I could prop infinite times, b.
+3   

 6 days ago '19        #16
TDK 
Props total: 102 102  Slaps total: 2 2
 Arroz con Toto said
True Story. And yall Electricians be over charging up the Azz too!


Part of the game. Everybody gotta get a dollar. Some do, some don’t.


+4   

 6 days ago '22        #17
God Bless 
Props total: 1916 1 K  Slaps total: 1742 1 K
 TDK said
I feel yo pain bruh, trust me


Mine looked like that yesterday. Don’t let it be around the holidays, van literally stacked from top to bottom, front to back; boxes/packages covering literally every sq foot of the van completely, sh*ts ridiculous.
do yall go back and get another full truck cause that dont look anywhere close to 8 hours of work with those box sizes

 6 days ago '05        #18
Hadal Zone 
Props total: 39072 39 K  Slaps total: 1359 1 K
Never worked at Amazon but worked at Walmart distribution. Mayne you get into a different type of shape doing that work
+3   

 6 days ago '15        #19
Sleezymcman 
Props total: 8054 8 K  Slaps total: 1852 1 K
 lltreyll said
I remember when my uncle mentioned that he knew the guy hiring at the brand new Amazon Hub that just opened near where I used to live. They were hiring employees to sort and deliver.. At that point I had already been to that Amazon Hub and did Prime deliveries as a contractor. Out of curiosity my uncle got the guy on the phone and I asked him what the wages were per hour. If I remember right he said $18 to start. Meanwhile I already was able to make more by being an Amazon independent contract delivery driver instead of becoming a full on Amazon employee. Especially if I didn't even bother with that Hub and just did Amazon Whole Food deliveries where I was able to make about $80 to sometimes over $100 for a 2 to 3 hour open shift. So I said fu*k becoming an Amazon employee.

I also remember occasionally running into Amazon DSP drivers that went the employee route at that same hub, and I made sure to ask them if they knew how much could be made by doing contract work through Amazon instead of becoming an employee...Every one of them were shocked, and had no idea.

But there are decent benefits by becoming an Amazon employee, and it would be a consistent wage instead of how inconsistent work blocks would be as a contractor. Delivering all the random things people order through Amazon is incredibly rough work though. I remember how inaccurate the GPS was for contractors with Prime Hub deliveries, the hassle of not having keys to apartment buildings, and just how damn many packages there were. It wouldn't be any different if someone went the employee route. fu*k all that. I don't care if they supply the company vehicle or that there are benefits and an ability to do it full time. It paid less than being a contractor, and the work was completely fu*kin exhausting....I couldn't imagine doing that as a full time job, because you're gaurenteed to burn out quick. And that's just the Amazon driver part of things. I don't think I want to know what bullsh*t warehouse workers and sh*t have to deal with. No thanks.
Warehouse jobs are slave work. My boy worked at target warehouse making 28hr. Bringing home 850 a week. He quit after two months. He said that sh*t is fu*king exhausting. And he kinda buff so they would make him do the hardest sh*t.
+4   

 6 days ago '22        #20
Booda Sack  topics gone triple plat - Number 1 spot x1
Props total: 1098 1 K  Slaps total: 1017 1 K
If you consistently shop on Amazon you are part of the problem
+9   

 6 days ago '10        #21
Rick Ross 
Props total: 22264 22 K  Slaps total: 1213 1 K
 God Bless said
do yall go back and get another full truck cause that dont look anywhere close to 8 hours of work with those box sizes


there's boxes not pictured and each of those big bags are filled with 30-50 envelopes/small boxes

 6 days ago '09        #22
Burg Boy 
Props total: 3250 3 K  Slaps total: 504 504
I delivered for amazon 50 hours a week for 11 straight months. Pure hell… i hope i never have to go back.

I dont miss those 200 stops, 50 lb pet food, dogs barking when im within 20 feet of the house, amazon monitoring my every move in the van.. yes this includes myself on cam as well as my speeding/loose seatbelt/and sharp turns being tracked.
+8   

 6 days ago '18        #23
GodbodyRA 
Props total: 1183 1 K  Slaps total: 329 329
My Dsp is kosher. Guaranteed 8, familiar route, pick ya own schedule plus a weekly bonus. My route mostly rural 60-100 stops max. Ez $
+3   

 6 days ago '22        #24
Booda Sack  topics gone triple plat - Number 1 spot x1
Props total: 1098 1 K  Slaps total: 1017 1 K
Support local fu*k Amazon

 6 days ago '05        #25
pippen33 
Props total: 39795 39 K  Slaps total: 3138 3 K
 Arroz con Toto said
Them Drones and Robots will be coming thru quick keep complaining about wrapping and delivering!


No they really won't. They will need people to do deliveries for a long time. All of that drone talk is duck tales.
+1   



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