The Amazon juggernaut is thriving in the coronavirus age. But, like all other departments, its public relations department has certainly had to work overtime. Recent feuds with employees have stained the company’s image and, as a result, automation looks more attractive to it than ever before.
And yet, given the way the coronavirus is shaping the economy, and how Amazon has flourished as a result, it is very likely that the steps it takes now could set a precedent for many enterprises going forward.
Conflict and Dissent
Amazon received a lot of negative attention back on Good Friday, when two employees were fired after speaking publicly about misgivings with the lack of health initiatives for many warehouse workers. The issue was that not enough was being done to stop the spread of the coronavirus.
The two employees, Maren Costa and Emily Cunningham, had led a petition straight to the CEO’s office door, demanding improved safety protocols, additional benefits, and the shutdown of certain facilities in the event of emergency.
And while there is nothing unusual about this — protest almost always comes from the employees on the lowest wages — the criticisms spread to the upper echelons of Amazon’s institutions. With one of their senior principal engineers at Amazon Web Services in turn quitting at what he saw was a strongarm move by boardroom members to keep whistleblowers quiet for voicing concerns about the coronavirus. Amazon’s stance was not helped by the then well-publicized outbreaks of the coronavirus, subsequently in many of its hubs.
And yet the company seems to have dealt with these PR-simmering pots relatively quickly. After it began disciplining workers for violating social-distancing rules, in addition to publishing a series of blog posts about its plans to crack down on COVID-19, its stock prices responded positively. And in a time of mass uncertainty, redundancies and lockdown, it made welcome the news of hiring up to 175,000 new employees across the UK.
Another thing that may have boosted stocks was Amazon’s A-game: it’s delivery-to-home model, which more and more investors began to admire as a market winner. This, in addition to stocking up its Prime cloud with more music, films and games for the furloughed also won over many investors.
Recruitment During the Pandemic
The virus may have united both tech and warehouse workers (both groups of which would, ordinarily, have little in common) but there is a divergence here. Tech worker’s conditions are substantially improving. While Amazon’s gigantic warehouse workforce is costing it an arm and a leg, a cost that is exacerbated by higher hourly pay, overtime, and in coronavirus safeguarding measures.
It is very easy for Amazon to recruit and get rid of warehouse employees, especially if they are temp workers, and indeed the average warehouse turnover of staff has more than doubled over the past 10 years. But it is another matter to hire more skilled workers. And especially during a pandemic. Vetting and training is also much harder.
If Amazon is facing a skills gap, it is in software development recruitment. Indeed, most of Amazon’s job postings are looking to recruit there. This is all part of Amazon’s bigger picture to create a more streamlined base of higher-skilled employees. It is a fact of life that, the more warehouse staff members there are, the more likely there are to be more inefficiencies in Amazon’s fulfillment centers. Amazon knows that with fewer people, it can not only more easily protect them, it can lower overall expenses at the same time.
The coronavirus pandemic has exposed this divergence between warehouse and tech workers into the spotlight more than ever before. And so we can be sure that the Giant will be looking to redefine what it currently considers as ‘essential’ workers. The delivery drivers may be able to obtain better pay and benefits, but for all the other laborers in the ‘low-skilled’ gap, automation is beckoning.
The signs are there that Amazon is readying a tech portfolio for a shift in exactly that direction. By investing more in electric digital data processing, AI, and advanced robotics. The delivery drivers may even risk job losses, because as we saw back in 2018, Amazon has already attempted including robots into the delivery process. And drone technology is only expected to improve.
The point is that the coronavirus has caused a headache for Amazon. If its workers are going to complain about conditions and continue to cost a lot of money, then the pandemic might be a prompt to accelerate investment in the use of robots. These robots will in turn help to minimize contact with the reduced human workforce in operation.
It is important to reflect that Amazon’s seeming unstoppable rise does not translate into a continuing and guaranteed business imperialism. It’s delivery model could wreck vendor business, and the expectations for it to succeed are so great that it could almost certainly disappoint on its own profitability and productivity — which all hinges on a near-infinite number of Big Data metrics. And we have already seen Amazon drop the ball on its promise to deliver Prime next-day orders.
Amazon has invested a lot of money into Prime and charges a significant amount of money for the service. If it cannot regain control of its supply chains, then all of this investment will be near-wasted. Venders that underperform will not be tolerated for long. One only has to look at another giant, Walmart, which ruined lots of brands and reputations by pushing a relentless (and ultimately over-ambitious and over-stretched) mantra of getting all inventory out as fast as possible.
But Amazon seems to be doing very well at the present moment, but it could be partly illusory. We have yet to see the true implications of the economic recession, and several of Amazon’s e-commerce platforms have already been blacklisted over a combination of consumer complaints and the personal antagonisms between Trump’s white house and Jeff Bezos.
At the same time, Amazon has made some shrewd moves: such as committing to aid the Canadian government, and in helping with the distribution of PPE. This could also be the beginnings of a series of successful government partnerships.
It is still too early to tell. Amazon is clearly at the top of its game at the moment, but history tells us they cannot afford to ignore the cracks forming along the base of their enterprise.
Thomas Owen is logistics manager at Dpack packaging solutions.
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