Amazon’s Crisis must Be a Learning Curve for the Online Retail Industry

Amazon

AmazonAmazon is running out of candidates to hire, according to a leaked letter.

According to a leaked internal analysis from Amazon from mid-2021 that Recode analyzed, the company may run out of workers to hire in its US facilities by 2024. If that takes place, the online retailer’s goals for development and the quality of its services, as well as its leadership in e-commerce, may be in jeopardy.

Two of the six “levers” Amazon could use to delay this labor crisis by a few years are raising wages and increasing warehouse automation, but only a series of comprehensive changes to how the company conducts business and handles its employees will significantly alter the timeline.

The study, which hasn’t been previously disclosed, claims that if things continue as they are, Amazon will run out of employees in the US network by 2024.

The company was predicted to use up all of its labor resources in the Phoenix, Arizona, metro area by the end of 2021 and in the Inland Empire region of California, about 60 miles east of Los Angeles, by the end of 2022 which were cited in the report as a warning that Amazon’s labor crisis was particularly imminent in a few locations. The available pool of workers was determined by Amazon’s internal study based on factors including household income levels and the distance from existing or future Amazon facilities; the pool does not cover the complete adult population of the US.

Although declining to comment, Amazon spokesperson Rena Lunak did not dispute the information contained in the internal study that Recode had access to. The study offers a unique window into the personnel issues that Amazon is currently dealing with beneath its polished façade of one-click online ordering and same-day Prime delivery. And it sharply illustrates just how much of Amazon’s commercial success and its long-standing status as a favorite of Wall Street investors depends on its workforce of over 1 million individuals who choose, pack, and ship its customers’ purchases almost 24/7.

The exposed internal data also serves as a warning to other companies who want to adopt the management style popularized by Amazon, which prioritizes employee productivity above all else and cycles through the equivalent of its entire front-line personnel annually.

That churn wasn’t an issue for Amazon in the past; in fact, there were times when it was desirable. Jeff Bezos, the founder and former CEO of Amazon, viewed his warehouse staff as necessary but replaceable and worried that employees who stayed at the company for an extended period of time would become complacent or, worse, angry. But as the internal study Recode reviewed demonstrates, some Amazon employees are already understanding that approach won’t last for very long, especially if management is serious about making the company the “Earth’s best employment,” as Bezos declared in 2021.

Undoubtedly, some employees’ perception of working at a warehouse as a quick stop on the road to bigger things contributes to a portion of Amazon’s turnover problem. However, some employees have long complained about the particular stressors of working at Amazon, including the fast-paced, repetitive nature of the work, the constant electronic monitoring of employees’ every action, and the relatively high accident rates. Some former Amazon employees claim it’s worse to work for Amazon than some well-known competitors like Walmart or FedEx, according to a company study of 31,000 workers who left the business that was cited the report. Those who left the internet behemoth and soon after began working for another company “ranked Amazon much worse on employment fitting talents or interests, labor requirements, shift length, and shift scheduling.

Amazon is no longer the obvious first choice for anyone looking for work in these types of facilities and the beginning minimum salary that comes with it, as traditional competitors are increasing their investments in e-commerce warehouses. And in some areas of the nation, that dynamic is already in action.