HRM Issues at Amazon
The company Amazon has been expanding its business from the last of the nineteenth century
in the both ways horizontally and vertically in the whole world. The company is also identified
as one of the most problem facing companies among the recent global scenario. The problems
which have been identified are related to the internal structure of the company. Unreasonably
high standards and expectation, over forthright leadership, breeding unhealthy competition
among the co- workers, in sensitive management, favoring criticism over harmony, lack of
benefits, disregarding employees' need for work-life balance, lack of praise and finally unfairly
ranking system for the employees are the major problem of the company. The main human
resource problem of the company amazon is their employee retention strategy and the over
timing policy for the employees. The human resource which the company it using a vast
number of people because of the global market of the company.
Human resource planning of Amazon
Human resource planning of Amazon includes the Employee-Retention strategies of the
organization. The employee retention policy differs in different industries. Amazon’s “ only
the strongest survive” employee retention policy is both appreciated and criticized worldwide.
In a poster of Amazon the organization has shown a child as a low-retention employer.
According to some respondents different HRM strategies are to be found depending on the
nature of the business. Few commentators have also suggested that the strategy of higher
employee turnover can prove to be appropriate for companies like Amazon(hbswk.hbs.edu,
2017). As amazon is one of the companies where the loyalty of the customers is associated
with the products and its prices and less towards its employees, this strategy seems to be work
successfully for the organization.
Gearing a retention is usual phenomenon for companies like amazon. While considering
turnover it is important to focus on the people who are leaving the company. Most of the
employees who are well paid and expert in cloud computing often leave because of poor
treatment.
According to ITG amazon’s business model is highly dependent on the scale, efficiency and
automation(Rosin, 2017). The HR or recruitment strategy needs to be revised in such a manner
so that it attracts and retain the employees which will help in the acceleration of the business.
Proper use of recruitment policies can also improve the performance and competitive
advantage factors. According to Gopal Parmeswar the retention policy needs to be governed
by the employee role of the organization. The two track policy has been successfully strategized
for this company.
Although experts have commented that low-retention policies can play an important role in HR
strategies, some have expressed their negative views on this policy (hbswk.hbs.edu, 2017).
According to some this policy highlights the negative side4 of capitalism and this move is
against democratic recruitment policies. The New york Times report on Amazon’s personnel
strategies generated severe debate among the experts. The article itself can be questioned as
the article mainly focused on the interviews with the already retented employees or the ones
who have already left the organization (hbswk.hbs.edu, 2017). This implicates severe
restrictions on the movements of the reporter inside the organization. If the article is considered
to be authentic one, the organizational strategy has been portrayed negatively. According to
this article the personnel strategy of Amazon is to offer exciting jobs and provides opportunity
to earn high compensation but the jobs become too demanding for the employees. Particularly
it is difficult for the employees with health problems and family issues (Rosin, 2017).
Contradictorily the low retention HR strategy is regarded as a successful one by the customers.
Though high retention strategies seem to be more attractive for the employees, investors and
customers, Amazon seems to be believed in the policy of fewer, better trained and better-paid
employees to run an organization successfully.
Employment relations
The employee grudge against the organization has led to a lower profit scale of Amazon.
According to Eric Morehead employee happiness is more important than customer satisfaction
for organizational success. This problem can be resolved with greater transparency in the
recruitment system of Amazon (Streitfeld, 2017). According to the former employees of the
organization the bosses lack empathy and do not support personal priorities over job
priorities.the narratives from the former employees can help understanding the employment
relation and the employee relations relevant inside the company. The issues which the
employees have identified are
•
•
•
•
The company sets unreasonably high standards which seem to be impossible to
achieve for the employees(Streitfeld, 2017). The employees feel the pressure of
unreachable expectation. Unable to meet such standards they suffer from significant
distress.
The management style of the company has been often criticized to be a dominating
one. NYT also reported the authority to be bureaucratic.
This organization has always been transparent about who is high-achiever and who is
not. Employees are expected to work after their working hours and often for a long
period of time. According to the mentioned report the employees are encouraged to
negate the ideas of the co workers openly which lead to a unhealthy workplace
atmosphere(hbswk.hbs.edu, 2017). Many employees have told NYT that Anytime
Facebook Feedback tool is often used for scheming. In several cases the anonymous
criticism is often copied directly in the performance reviews of the employees.
Insensitive management is another factor identified by the former employees of the
organization.the employees commented that they are often judged or pushed out in
spite of personal crises(hbswk.hbs.edu, 2017). Though an Amazon spokesman
•
•
•
defended by stating that they would take swift action to correct the charges that have
been brought against them regarding employee dissatisfaction.
This organization favors criticism over harmony which further complicates the
employee relationship. One of the distinctive management belief of this organization
is that harmony in workplace is overvalued rather than the organization needs to
prompt the competitive spirit among the employees(Rosin, 2017).
Unlike other companies Amazon does not provide any special benefit to the
employees of the organization. They do not cater to the basic needs of the employees
and obsessed in meeting the customer demands.
Lack of praise and unfair systems of ranking are other issues that the employees have
pointed out(Rosin, 2017). This organization holds Annual Organization Level
Reviews and the managers discuss and decide the ranking of the employees in the
presence higher level managers. They often fire valuable talents just to meet a
standardized quota.
Managing diversity and work-life balance
The human resource of the company is the main base of the company. For managing the
diversity and the work life balance of the employee's, few human resource theories are helpful
which can be used by the authorities of the Amazon company. For developing and improving
the quality of the human resources and the recent problems which this company is facing
related to this topic motivational theory is the best one. As it is already known that the company
is a large one and also widespread. For this reason the people who are working in this company
is also diverse in nature and for managing this diversity the company needs to apply the theory
of motivation. By which the employees have been motivated through different teamwork
exercise,monthly awarding system etc. work life balancing is sometimes get so much difficult
for people (Armstrong & Taylor,2014). The extra workload which have been introduced by the
organization is become hard on the employees. So the company also have to think behave of
the employee and motive them to gather interest in their job. They also have to explain the
importance of the employee to them for creating faith for the company. The situation in which
people are to their work and the organization and are motivated to achieve high levels of
performance.the company also have to introduce goal achieving targets for the employees. The
organizational behavior theory is also have a deep impact in managing the diversity and the
work life balance of the human resource.
The company also have to keep in mind that the human resource they have, is the main capital
of the company. They have to focus in this factors and also have to change the strategies of the
company. Managing the diversity and work life balance is also concern of the
employees(Chelladurai & Kerwin, 2017). The company also have to understand that the
diversity within the employees of the company is not a distraction for the company. It is the
biggest advantage which this company is generally facing right now. They can collect different
kind of new idea’s from this diverse human resource and analyse them and finally use them as
new strategic plan (Brewster, Houldsworth, Sparrow & Vernon, 2016).
Ethical and legal contexts of HRM
The ethical and the legal context of the company is the main factors of a company which is
totally related to the human resource of the company. The ethics of the company is the base of
the company. Every company has their own ethical policies who have been maintained by the
whole company. The different company also have some ethical context which is same in
nature(Budhwar & Debrah,2013). These ethical contexts give the employees the opportunity
to be considered as same with every other individual. According to the new york times article,
the ethical and the legal contexts give the employees the power to understand their ethical and
legal powers of the employees. The short terms goals of the company may be achieved through
the free market principle. The company also have to maintain the quality of human resource
requirement. The motivational theory also can be included in this ethical and legal contexts of
the human resource management.the legal regulation which have been identified by the
government is being implemented by the Amazon company. They take these issues, legal and
ethical issues very seriously and also work on them in the annual basis(Shafritz, Ott & Jang,
2015).
According to the new york times, the workers are encouraged to tear apart one another's ideas
in meetings and other activities.the company also has to focus in the flexibility of the
employees which is very valuable for the company and employees are very much attracted by
this process. In addition, the capability of the employees can be increased by this process. The
legal issues of the company also have be viewed by the employees and the company itself.
They also have to focus in the communication system of the company which can easily upgrade
the ethical and legal contexts of the human resource management(Jones & George, 2015). This
company has always targeted an unreasonably high target. They also have to maintain these
internal behaviour of the company to manage the human resource of it. When both the company
Amazon and its employees understand the overall ethical and legal values of the company it
would be easier to resolve the problems of the company(Riley, 2014).
Conclusion
According to the new york times article the employees of the Amazon company is highly
dissatisfied with the companies different issues. But the company has identified that the issues
which have been identified by the employees do not come under the policies of the company.
But according to the experts the issues which have been identified are basically affecting the
profit of the company and also decrease the growth of the Amazon company.
(Further Articles added for more insights in the Amazon practices)
The Ethical Issues With Amazon
January 12, 2019
At this point I think we’ve all heard something shady about Amazon. A hint of unethical
practice, a stray article about something in their warehouses. But when a mega-corporation
starts to become pervasive and ever present in our daily lives it’s hard to imagine an
alternative. Amazon has reached such a height that for many it may seem like a necessary
evil in modern society, and it can almost seem fruitless to learn why they are problematic. If
it’s unavoidable, better to not know just how bad it is.
But here’s the thing: for some of us, Amazon is avoidable.
Amazon thrives off convenience and low prices, meaning that for certain members of society
it really can function as a valuable tool due to their lack of income or time outside of work,
both larger systemic problems that need to be addressed in their own right. But for many of
us it’s not necessary for our daily lives. It just isn’t. I’ve now gone for nearly two years
without buying anything from Amazon, including digital purchases like Prime, Kindle or
Audible and, while some of this is due to my own privilege and living about 5 minutes away
from my local high street, it has been achievable.
Beyond questioning the ethics of a business that does best in a hyper-consumerist and
unsustainable environment, when you start to look into it properly it seems like nearly
everyone who works at Amazon is having a terrible time. Here are the reasons why I choose
not to shop on Amazon, which I hope you’ll consider too.
Tax Avoidance
More so than any company I can think of, Amazon appears to have built their profit
maximization strategy around avoiding taxes at various levels
(source)
Taxes are important. And when the ultra wealthy aren’t paying them, they’re even more
important. Taxes redistribute money in such a way that all citizens can receive the services
they need (such as education and healthcare), addressing issues like poverty and income
inequality by making sure our most vulnerable are able to have their needs met for free.
When high earners, or big business, don’t pay their taxes it means there’s less to go around
for everyone, and it’s the vulnerable who end up being hurt. Unfortunately not paying taxes is
also what corporations apparently love to do (including the ones you think may be
ethical, more info on Ecover’s tax avoidance here).
One serial tax avoider is Amazon. In fact it was avoiding tax that got them where they are in
the first place. Founded in Seattle by Jeff Bezos in 1994, Amazon was created to exploit the
loophole of not having to collect sales taxes when selling online, which at the time was only a
requirement for physical stores. Although in the US Amazon now does pay sales tax in every
state that has one, calculations suggest that if Amazon had been paying taxes from the start it
would have paid a total of $20.4 billion in sales taxes from its founding until 2015.
In the US Amazon also barely pays any federal income tax, both through avoiding booking
any profits for years, instead investing everything back into the business, and
through aggressive tax planning. According to Matthew Gardner at the Institute on Taxation
and Economic Policy Amazon paid no federal tax on $5.6 billion in U.S. profits, and in the
past five years paid a rate of 11.4% on its profits of $8.2 billion, around a third of what they
should pay.
Beyond this, Amazon is also adept when it comes to playing state and local governments
against each other, demanding large subsidies in order to set up an Amazon facility in their
area. Good Jobs estimates that Amazon has received at least $1.6 billion in tax incentives,
many of which are given in the hope that Amazon’s presence will result in an economic
boom and job opportunities in the area. Research suggests, however, that this doesn’t work.
There is no return on investment for local areas, in fact it’s a huge waste of
money. Employment remains stagnant after Amazon moves in, and economic development
doesn’t materialise by incentivising big businesses. Amazon just gets to avoid paying more
taxes.
Across the pond in the UK Amazon only paid £4.6 million in taxes in 2017, by routing sales
through Luxembourg, a well known tax haven. Almost 75% of Amazon’s 2017 UK revenue,
amounting to £6.88bn of UK sales, was registered through their Luxembourg subsidiary.
These numbers suggest that Amazon’s tax rate ended up at 0.5%, leaving £50 million of tax
unaccounted for. In October 2017 the European Commission also ruled that Luxembourg had
improperly allowed Amazon to evade taxes on around 75% of its European profits, and
ordered Luxembourg to recover $250 million plus interest from Amazon.
Warehouse Abuses
Despite being a huge corporation, with a CEO who is literally the richest man in the world, in
the US Amazon also ranks highly on the list of employers with huge numbers of warehouse
employees enrolled in SNAP, aka food stamps. In Ohio 1 in 10 employees use SNAP, in
Pennsylvania it’s 1 in 9, and in Arizona it’s nearly 1 in 3.
Amazon’s fulfillment center wages are, generally speaking, lower than the average wages for
warehouse employees elsewhere. “The average warehouse worker at Walmart makes just
under $40,000 annually, while at Amazon would take home about $24,300 a year,”
CNN reported in 2013. “That’s less than $1,000 above the official federal poverty line for a
family of four.”
A November 2016 study by the Institute for Local Self Reliance, a community development
advocacy group, analyzed more than 1,300 wage postings on Glassdoor and found that
positions at Amazon’s fulfillment centers paid about 9 percent less than the industry average.
And when the researchers homed in on 11 major metro areas to account for differences in
cost of living, they found that Amazon’s wage dip was even more pronounced: The company
was paying 15 percent less than comparable positions in each area. A January 2018 study by
The Economist using different methods found similar results.
(source)
While Amazon did announce in 2018 that it would finally be raising wages for warehouse
workers, there are still many issues for those who take these jobs.
If you’ve heard something bad about Amazon it’s usually to do with their warehouses, where
employees pick and pack products for delivery. There are multiple accounts of abuses at
various Amazon warehouses, both in the UK and America, but certain details seem to appear
again and again.
Multiple reports can be found of employees pushed to meet extremely high targets, subjected
to strict breaks and a terrifying work environment, monitored electronically, and worried that
not meeting targets will result in immediately losing their jobs. People talk about peeing in
bottles out of fear of being disciplined or terminated for ‘wasting time’ going to the toilet, to
the point where employees deliberately decide not to drink water so they don’t have to pee
while working. One employee became sick while pregnant and was given a warning, one was
hospitalised after having an epileptic seizure at work and received a strike for not showing up
the next day, another turned up for work with gastric bug, had to go home after two hours and
was given a strike despite getting a sick note from their doctor. One woman
tragically suffered a miscarriage while working, which she believed was ‘partly as a result of
continuous pressure to hit targets’.
In UK warehouses there are also records of increased depression, anxiety, and suicidal
thoughts in employees, alongside bullying and harassment.
The links between Amazon warehouses and ill health is sadly not new. In 2011 staff in a
Pennsylvania warehouse worked in 100-degree heat with ambulances waiting outside, taking
away workers as they fell. In the UK a 2018 Freedom of Information request revealed
that ambulances had been called out 600 times to Amazon’s UK warehouses in the previous
three years. The request showed 115 call-outs to Amazon’s site in Rugeley, near
Birmingham, in comparison to only 8 calls to a nearby Tesco warehouse of a similar size.
And, heartbreakingly, in 2018 The Huffington Post reported on the case of Jeff Lockhart Jr.
In 2013 Jeff, an employee at Amazon’s warehouse in Chester, Virginia, collapsed at
work and was pronounced dead less than two hours later. His autopsy cited heart problems as
the cause of death, and it’s impossible to know whether the exertion or intensity of the job
was a contributing factor. What we do know, however, is that a public records request
revealed the following about the Chester warehouse:
In its first two and a half years of operation, more than 180 calls were placed to 911, many
of them for patients in their 20s and 30s. The most common issues cited were difficulty
breathing, chest pains, cardiac problems, spells of unconsciousness or other undefined
illnesses. The frequency of calls tended to climb during peak season.
Beyond suggesting a correlation that can’t be definitively proved, we also know that Jeff’s
wife and children were left vulnerable. Jeff was employed as a temporary worker at Amazon,
meaning he had no life insurance or health insurance through his workplace. When he died,
the family received nothing.
Exploitation of temporary workers
“Somebody did studies and spreadsheets and crunched those numbers,” he said, “and figured
out that the cheapest way to get that job done is to treat people like that.”
(source)
Jeff’s situation was not a unique one. Amazon warehouses are often staffed by numerous
temps hired by external companies who Amazon outsource to. Some of these temps, like Jeff,
are hired for the extra work created around the holidays, known as ‘peak season’, and let go
shortly after with minimal notice. Some are kept on, as Jeff was, and some are brought in as
temps outside of that season altogether. The idea is that eventually these temps should
graduate to proper employee status, which will provide more security, better pay and benefits,
however there seems to be no proper protocol for how this happens. Jeff had died in January,
well after peak season had ended and confident that he would become permanent staff, but
there was nothing to indicate if or when this would happen. A separate report talks about
other warehouses where no one had been made permanent for 6 months and two years
respectively, and past temps from Jeff’s warehouse emphasised that there was no guarantee
he would ever have become a permanent employee. It seems this is a common pattern of
behaviour for more than one Amazon warehouse (although not necessarily all of them). As
his widow explained:
What bothers her most is how expendable her husband seemed to be inside the warehouse
system. She believes that had he not died as a second-class temp worker, his family might
have been in a better position to sustain the loss. “Just feeling like he wasn’t human, like he
was just a piece of paper,” she said. “You know, [they] can dispose of you. It kind of hurt.”
Exploitation of Chinese workers
Amazon also have factories for manufacturing with similar issues to those in their
warehouses. Chinese factories often take on temporary workers which are hired from external
agencies, known as dispatch workers. It is the law in China that each workplace can’t have
more than 10% of their workers be dispatch workers, however an investigation from China
Labor Watch found factories in China manufacturing Amazon electronics, such as kindles
and smart homes, had workforces that were illegally comprised of over 40% dispatch
workers. Working conditions between dispatch and normal workers were found to be
decidedly different, despite positions being the same.
The investigation found that regular workers received five days of training while dispatch
workers only received eight hours of training, despite the legal stipulation being 24 hours of
pre-job safety training. Dispatch workers were also required to pay physical examination
fees, take sick leave unpaid, receive no extra wages for overtime, receive no social insurance,
and have no contributions made to their housing provident fund (even though dispatch
workers are meant to be registered for social insurance and employers are meant to make
social insurance contributions). Beyond this, often dispatch workers are sent on leave during
the factory’s off season, often for months at a time with no payment.
Despite these differences, all workers in the factories are subject to long hours, low wages,
and poor conditions.
Workers put in over 100 overtime hours during peak season, and there was an instance of
workers working consecutively for 14 days. The average monthly wage in Hengyang is 4,647
RMB ($725.22 USD), however, workers at the factory on average earned wages between
2000 – 3000 RMB ($312.12 – $468.19 USD) during off-season. As wages are low, workers
must rely on overtime hours to earn enough to maintain a decent standard of living. In spite
of that, the factory cuts the overtime hours of workers as a form of punishment for those who
take leave or have unexcused absences.
Other major issues at the factory include inadequate fire safety in the dormitory area, lack of
sufficient protective equipment, absence of a functioning labor union at the factory, and strict
management who subject workers to verbal abuse.
A toxic environment for white collar workers
Nearly every person I worked with, I saw cry at their desk.
Outside of blue collar jobs Amazon treats its office staff pretty terribly too. In 2015 The New
York Times released a lengthy report on the workplace culture at Amazon’s Seattle offices,
and it makes for intense reading.
Interviews with over 100 current and former employees paint a picture of an environment of
‘unreasonably high’ standards and ridiculous working hours (the report details emails
arriving after midnight then text messages asking why they weren’t answered, ‘marathon’
conference calls on Easter Sunday and Thanksgiving, criticism from bosses when they can’t
reach employees on vacation, and working at home on nights and weekends). Being ‘vocally
self-critical’ is described in the leadership principles, workloads are described as ‘extreme’
by employees who used to work on Wall Street, and several fathers talked about leaving as
they felt pressure from colleagues and bosses to spend less time with their families.
Employees were also often convinced they’d be replaced with younger staff members who
could put in more hours. The New York Times interviewed one former employee, a father of
two, who wondered whether Amazon would bring in younger workers with fewer
commitments. He was 25 himself.
The report also talks about regular meetings known as ‘business reviews’. In these meetings
employees were expected to memorise print outs given to them a day or two before,
sometimes up to 60 pages long, of data on which they are cold-called and pop-quizzed
about. Answers like ‘I’ll get back to you’ were deemed unacceptable in these reviews, and
workers were told they were stupid. Multiple people reported people crying in the office.
“The company is running a continual performance improvement algorithm on its staff,” said
Amy Michaels, a former Kindle marketer.
Workers are encouraged to tear apart each others ideas in meetings and to send secret
feedback to one another’s bosses. The examples given include ‘I felt concerned about his
inflexibility and openly complaining about minor tasks’, and interviews with other employees
suggest this tactic is often used to sabotage others. You know what other organisation
encourages that kind of behaviour?
Workers are also culled annually. The entire workforce is evaluated, ranked from best to
worst, and the bottom performers lose their jobs. Some workers who suffered from personal
crises felt they were evaluated unfairly or edged out instead of being allowed to recover.
Multiple interviewees described returning from cancer treatment and subsequently receiving
low performance ratings and being told their personal life was interfering with their
work. Employees returning after serious surgeries and miscarriages were put on performance
improvement plans and monitored to ensure their focus stayed on their job. One woman
received low ratings after cutting back working nights and weekends to care for her dying
father. Another who miscarried twins had to go on a business trip the day after her surgery
because she was told the work still needed to be done.
The job culls also lead to a culture of tribalism and scheming in order to ‘take down’ certain
employees or survive the ranking process:
Many workers called it a river of intrigue and scheming. They described making quiet pacts
with colleagues to bury the same person at once, or to praise one another lavishly. Many
others, along with Ms. Willet, described feeling sabotaged by negative comments from
unidentified colleagues with whom they could not argue. In some cases, the criticism was
copied directly into their performance reviews.
Finally, the report also drew a connection between Amazon’s leadership principles, its job
elimination system and its gender gap (the list of officers is comprised of 6 white men and
and 1 white woman). Several former and current high level female executives talked about
how intangible criteria like ‘earn trust’ or the encouragement to regularly disagree with
colleagues worked to their disadvantage, as being a forceful woman often doesn’t go down
too well in the workplace, instead leading women to be deemed ‘unlikeable’.
It seems that Amazon has a tendency to rely on data driven methods and analysis for running
its operations, but this approach ultimately results in dehumanising employees and
disregarding other factors at play, such as race and gender, that unconsciously affect the way
business is conducted. This all points to an unfairly weighted, and seemingly awful, place to
work. The report also details how many employees don’t last long at Amazon, and jump ship
to other organisations such as Google and Facebook.
Delivery drivers & the gig economy
Asides from the employees above, Amazon also employs its delivery drivers through a gig
economy system known as Amazon Flex. Operating in a similar way to Uber, it can be used
as a source of supplemental income, however it can’t be used to make a living.
One of the reasons that Flex Drivers can’t earn a full living is because Amazon’s algorithms
don’t properly compensate them for their work. Like Uber drivers claiming customers, Flex
drivers claim blocks of time to deliver certain packages. While Amazon will pay you for the
allotted block if you deliver in less time than estimated, these estimates don’t account for
factors outside of driving, such as navigating large apartment buildings, leading to a ‘99%
probability that you will exceed your block end time.’ If you go over that time, you aren’t
paid for it. Drivers across the US have also claimed that hours are capped at 40 hours per
week, defeating the notion of freelancers choosing how much and when they work, and an
increasing inability to secure enough hours to even make it up to 40.
“When Flex first started all blocks were released at 10 PM. Then they changed to all blocks
being released exactly 24 hours in advance. Now they have changed to completely random
times”
The increased demand for blocks, and the increased difficulty of securing them, has led to
cheating amongst Flex drivers just to get regular hours. Drivers use auto-tap applications
(basically the equivalent of botting on Instagram) constantly just to secure work. A former
driver who suffers from arthritis also created a mechanical device known as a Flexbot, just to
give disabled drivers the chance to compete with able bodied drivers when it comes to
tapping on the blocks.
And like its warehouses both domestic and abroad, Amazon has also outsourced finding these
drivers to courier services, who then subcontract to drivers. Lawsuits filed in 2015 and 2016
against these courier services named Amazon specifically, and the suits contained complaints
such as failure to pay minimum wage, failure to compensate overtime, failure to provide meal
periods, employee misclassification, and violations of the unfair competition law.
The source of all of these problems boils down to Amazon’s adoption of a gig economy
system: treating drivers as independent contractors without health care, benefits or
compensation if injured on the job, but expecting them to do the work of proper employees.
“It’s too bad that Amazon is continuing to pursue these structures, because it doesn’t have to.
All it has to do is pay the minimum wage, that’s all,” Ruckelshaus said, sounding defeated.
“It seems like they’re jumping through a lot of hoops to avoid being an employer for not
really a good economic reason.”
It seems a lot of issues with Amazon workers would be solved if they stopped subcontracting
out for temporary and flexible employees. However, perhaps the treatment of permanent staff
in their offices suggests that Amazon’s workplace culture would be toxic no matter what, but
at least employees might receive slightly better pay or benefits.
Exploiting those who sell on Amazon & those who buy
Not content with hurting just about everyone it employs, Amazon also finds a way to hurt
those who sell on their platform and those who buy on it. Research by ProPublica found that
Amazon’s algorithm is built in a specific way so that when customers search for something
they’re directed towards products from Amazon or sellers who pay for Amazon’s services,
even when these items are significantly more expensive than other competitors selling on the
site.
Customers found that Amazon ranks products by price + shipping, but conveniently omits
shipping costs for its own products or those sold by companies that pay Amazon. As
competition gets more and more aggressive sellers are forced to join the “Fulfilled by
Amazon” programme, which requires paying Amazon to warehouse and ship their products,
as it increases their chances of winning the buy box. The fees for the program can amount to
between 10 – 20% of sales, meaning that smaller businesses lose money and customers are
exploited.
Additionally, when certain products sell well Amazon has also been known to use this data in
order to remove any third party sellers from their website, become the only sellers of that
product and then raise prices on it, using their own software to leverage monopoly power and
earn more money.
Amazon’s poor treatment of workers is catching up to it during the coronavirus crisis
A big surge in orders isn’t the only reason Amazon is struggling to keep up
By Casey Newton@CaseyNewton Apr 1, 2020
It’s been clear for weeks that Amazon faces an unprecedented challenge in coping with the
fallout from COVID-19. With tens of millions of Americans now dependent on online
delivery for their food, medicine, and other essential items, the nation’s No. 1 e-commerce
company is buckling under increased demand. And as fulfillment center employees are
diagnosed with the virus across the country, Amazon’s already-restive workforce has
escalated its efforts to win better pay and safer working conditions. Among other things,
employees at affected locations have simply walked off the job.
You’ve likely felt the affects of the crisis on Amazon if you attempted to order anything from
the company in March. Once lightning-fast delivery times stretched into days and weeks. In
the case of grocery deliveries in San Francisco, Amazon had no available slots for Tuesday or
Wednesday.
Still, we really don’t know how badly Amazon is stretched. The company continues to
communicate via carefully worded statements to a handful of reporters, and CEO Jeff Bezos
has been absent from public life aside from one leaked memo and a pair of lengthily
captioned Instagram photos.
Fortunately, the Wall Street Journal is here to shed some light. Reporter Dana Mattioli and
Sebastian Herrera lay out the company’s struggles today in a must-read piece that brings new
data to the conversation. They write:
Amazon has been processing from 10% to 40% more packages than normal for this time of
year, according to an employee tally at one delivery center. The company’s website had
639,330,722 visits for the week of March 9, according to data from Comscore, up 32% from
the year earlier.
From Feb. 20 to March 23, Amazon’s sales of toilet paper increased 186% from the yearearlier period, according to analytics firm CommerceIQ, which said that before the
coronavirus hit it had forecast a 7% increase for the period. CommerceIQ said sales of cough
and cold medicine grew by 862%, compared with a forecast growth rate of 110%, and
children’s vitamins by 287%, compared with a forecast rate of 49%.
Even after 25 years, Amazon still tends to white-knuckle it through every holiday season,
barely keeping up with demand despite months of preparation. The Journal story illustrates
how every day of March was essentially Black Friday for the company. According to the
analytics firm CommerceIQ, sales of home and kitchen items on Amazon are up 1,181
percent year over year. Even if a business sees a surge in sales coming early — and Amazon
did begin ramping up supplies of face masks and health care supplies in January after
spotting the initial spike in demand — I’m not sure there’s a company on earth that could
have handled the deluge in orders.
But the story of Amazon’s struggle against the coronavirus is not simply one of demand. It’s
also a story about the company’s increasingly fractious relationship with its own workforce.
For years now, a growing body of journalism has documented how Amazon’s relentless drive
for efficiency in its fulfillment centers has led to injury and even death. And now these
employees are working shoulder to shoulder with colleagues who may be infected with a
deadly virus and spreading it before they even show symptoms.
It’s an incredibly fraught moment for these workers — but it’s also a moment when they have
more leverage with their employer than perhaps they’ve ever had before. The Journal story
notes that Amazon caved on several longstanding worker demands — including raises and
paid time off — after the majority of workers at some sites did not show up for their shifts.
On Monday and Tuesday, these workers — as well as workers at Amazon-owned Whole
Foods and the independent grocery delivery service Instacart — pressed their advantage.
Across the country, workers staged walkouts, strikes, and sickouts to demand hazard pay and
better health protections. Nitasha Tiku and Jay Greene captured the moment in
the Washington Post:
Amazon’s warehouse workers have asked the company to offer paid time off for those who
feel sick or need to self-quarantine, as well as to temporarily close warehouses for cleaning
where workers test positive. One sign at Monday’s protest read, “Alexa, please shut down &
sanitize the building,” referring to the company’s digital assistant.
About 50 workers walked out Monday, according to Chris Smalls, a worker at the warehouse
who helped organize the action. Amazon, which is trying to hire 100,000 workers to address
the crush of coronavirus-related orders, disputed that figure, as well as the complaints that it’s
not doing enough to protect workers. Only 15 employees participated in the demonstration
out of 5,000 who work at the warehouse, Amazon spokeswoman Lisa Levandowski said in an
emailed statement.
Smalls was fired later that day.
Here’s Amazon’s choice in a nutshell. It could grant workers paid time off if they feel sick
but haven’t tested positive for the coronavirus, further reducing its shipping capacity in the
short term. Or it could deny their requests for as long as possible, buying the company time
as it rolls out a plan to bring on 100,000 new workers. The former choice strikes me as the
moral one. The latter is the one that will be justified as “customer obsession.”
But the previous few weeks have made me wonder where Amazon would be today if it were
as “obsessed” with the well being of its workers as it was with the people buying all those
household products. My colleague Josh Dzieza wrote earlier this year about how the
company has increasingly come to treat its warehouse workers as robots, automating every
possible aspect of their jobs in the name of efficiency. This passage about eliminating “micro
rests” has stayed with me:
Every Amazon worker I’ve spoken to said it’s the automatically enforced pace of work,
rather than the physical difficulty of the work itself, that makes the job so grueling. Any slack
is perpetually being optimized out of the system, and with it any opportunity to rest or
recover. A worker on the West Coast told me about a new device that shines a spotlight on
the item he’s supposed to pick, allowing Amazon to further accelerate the rate and get rid of
what the worker described as “micro rests” stolen in the moment it took to look for the next
item on the shelf.
People can’t sustain this level of intense work without breaking down. Last
year, ProPublica, BuzzFeed, and others published investigations about Amazon delivery
drivers careening into vehicles and pedestrians as they attempted to complete their
demanding routes, which are algorithmically generated and monitored via an app on drivers’
phones. In November, Reveal analyzed documents from 23 Amazon warehouses and found
that almost 10 percent of full-time workers sustained serious injuries in 2018, more than
twice the national average for similar work. Multiple Amazon workers have told me that
repetitive stress injuries are epidemic but rarely reported. (An Amazon spokesperson said the
company takes worker safety seriously, has medical staff on-site, and encourages workers to
report all injuries.) Backaches, knee pain, and other symptoms of constant strain are common
enough for Amazon to install painkiller vending machines in its warehouses.
COVID-19 has demonstrated the limits of a workplace that continuously pushes workers to
the point of harm in the name of efficiency. When 60 percent of those workers stop coming
into the office for fear of death, as happened recently at a fulfillment center in Southern
California, the “efficiency” of the system is revealed as a lie. It’s true that few businesses
could have capably prepared for the havoc that will be wreaked by a global pandemic. But
it’s also true that Amazon’s delivery delays are a long time in the making — and it’s the
company itself, just as much as the coronavirus, that deserves the blame.
Amazon is finally realizing it has a labor problem
What Jeff Bezos’ final letter to shareholders reveals about the company
By Casey Newton@CaseyNewton Apr 16, 2021
Today, let’s talk about the new tone Jeff Bezos is taking when talking about Amazon — and
whether we can expect it to have any practical effect on the company after he turns over the
CEO job to his successor, Andy Jassy.
A recurring theme in this column is Amazon’s general indifference to public perception. Last
month, it picked a losing fight with Congress over the unionization efforts at its Bessemer,
Alabama fulfillment center. A year ago, The Wall Street Journal revealed that the company
had lied to lawmakers about whether it used data from third-party sellers to inform product
development. A couple years before that, it conducted a sham search for a second
“headquarters” that angered politicians around the country.
The company has seen record growth every year since anyways, and it was the most-liked of
all big tech companies even before the pandemic made people more depend on it. (Amazon
picked up 50 million new Prime subscribers in 2020, an increase of about one-third in just 12
months.)
Given Amazon’s tendency to dismiss most criticism, you might have expected Bezos’ last
letter to shareholders to resemble an extended victory lap. Certainly it would be warranted:
Amazon is one of the most extraordinary businesses ever built.
But that’s not really Bezos’ style. His religious devotion to “Day 1” — the idea that
businesses ought to remain as paranoid and action-oriented as they were when they first born,
lest they be defeated by entropy — precludes that sort of long walk into the sunset.
And so perhaps we should not be too surprised that he took labor issues at the company head
on. Sure, Bezos has mentioned them before — his letter last year also devoted many
paragraphs to Amazon’s support for the $15 minimum wage, re-training workers, and so on
— but I’m not sure he has ever confronted critics quite so directly. Bezos writes:
Does your Chair take comfort in the outcome of the recent union vote in Bessemer? No, he
doesn’t. I think we need to do a better job for our employees. While the voting results were
lopsided and our direct relationship with employees is strong, it’s clear to me that we need a
better vision for how we create value for employees – a vision for their success.
If you read some of the news reports, you might think we have no care for employees. In
those reports, our employees are sometimes accused of being desperate souls and treated as
robots. That’s not accurate. They’re sophisticated and thoughtful people who have options for
where to work. When we survey fulfillment center employees, 94% say they would
recommend Amazon to a friend as a place to work.
Bezos knows that there will be more efforts to unionize in Amazon fulfillment centers, and
future ones might not be quite so easy to defeat. And so he sets two enormous goals for the
Amazon of the future. The company should be “Earth’s Best Employer,” he writes, and
“Earth’s Safest Place to Work.” And he plans to work on these projects personally:
In my upcoming role as Executive Chair, I’m going to focus on new initiatives. I’m an
inventor. It’s what I enjoy the most and what I do best. It’s where I create the most value. I’m
excited to work alongside the large team of passionate people we have in Ops and help invent
in this arena of Earth’s Best Employer and Earth’s Safest Place to Work. On the details, we at
Amazon are always flexible, but on matters of vision we are stubborn and relentless. We have
never failed when we set our minds to something, and we’re not going to fail at this either.
Is it just me, or does this sound like a man who has at long last gotten the message?
It has taken long enough. Pushback on the company’s claims of being a friend to the working
man has come from all corners, from Republican Sen. Marco Rubio to Democrats like
President Biden and Sen. Elizabeth Warren. And despite Bezos’ note that 94 percent of
employees say they would recommend Amazon as a good place to work, it’s the company’s
own workers who keep bringing disturbing information about their job sites to light.
(I’m still trying to unsee the photos of pee bottles that workers used in the absence of
bathroom breaks that they submitted to Vice.)
Over the past year, workers have filed at least 37 complaints to the National Labor Relations
Board alleging interference with workers’ right to organize, more than triple the total in the
previous year. Amazon mounted an anti-union campaign that included, among other
things, firing organizers on flimsy pretexts.
If workers were as happy at Amazon as Bezos says they are, you wonder why all of that was
necessary. And maybe — finally — he does, too.
There are technological ways of improving Amazon as a workplace, he says. The company
can rotate workers who perform repetitive tasks to lessen the strain on their bodies, for
example, using “sophisticated algorithms.” It will spend $66 million “to create technology
that will help prevent collisions of forklifts.” It will invent more things like this under Bezos
in his new role.
No tech giant deserves much credit for announcing a simple intention to do better. Amazon’s
business requires punishing physical labor, along with ruthlessly seeking new efficiencies
that chip away at workers’ dignity. The company is also leading the way in the use of
automation technologies that will make those same workers’ jobs ever more precarious. It’s
hard to even imagine how such a system could come to be seen as “Earth’s Best Employer,”
no matter how good Amazon’s forklift management software someday becomes.
But part of the unusual power that founder-led tech giants have is the way their creators can
marshal internal goodwill, along with their limitless finances, to make investments that others
won’t.
Bezos’ promise to become “Earth’s Best Employer” is on some level insane, because it
immediately becomes a cudgel with which lawmakers, the press, and the public can beat
Amazon every time another labor issue is discovered. (I predict “Earth’s Best Employer” will
become to Amazon what “don’t be evil” became for Google, or “move fast and break things”
became for Facebook: a mission statement that ultimately became more useful to critics than
it did to the company itself.)
The thing is, though, that Bezos is smart. Like, world-historically smart. He knows that he is
setting the bar far above where it sits today, and he knows that he is going to be held
accountable to it. Bezos’ version of the world’s best employer likely looks a lot different than
mine, but I also imagine that it could lead to higher wages, safer working conditions, and
better job training programs, at least for the workers who aren’t replaced by robots. Hopefully
it will lead to less union-busting and bottle-peeing as well.
In the days after the Cambridge Analytica data privacy scandal, Facebook executives looked
as tone deaf as Amazon has lately in response to its labor issues. Eventually, though, they
realized their tone had to change — and their business practices had to as well. We can argue
about how effective the 30,000 people hired to shore up the platform’s security have been,
but it’s undeniable that Facebook transformed its approach to integrity between late 2016 and
today. And it all started with a belated acknowledgement that the company had a problem.
Maybe the cursed @AmazonNews account will snipe at another member of Congress
tomorrow in the coming days, and all of the above will seem moot. Or maybe Amazon has
truly internalized that the time has come to shut up and listen.
For now, it sure seems like Jeff Bezos is. And I can’t say I saw that one coming.
This column was co-published with Platformer, a daily newsletter about Big Tech and
democracy.
Amazon violated employees' rights by firing outspoken workers: Labour board
The National Labour Relations Board has found that two outspoken Amazon workers were
illegally fired last year
New york Last Updated at April 6, 2021
The National Labour Relations Board has found that two outspoken Amazon workers
were illegally fired last year.
Both employees, Emily Cunningham and Maren Costa, worked at Amazon offices in Seattle
and publicly criticised the company, pushing it to do more to reduce its impact on climate
change and to better protect warehouse workers from the coronavirus.
Cunningham shared with The Associated Press an email from the NLRB, which said it found
that Amazon violated the rights of the two workers. The government agency also confirmed
on Monday that it found merit in the case. The news was first reported by The New York
Times.
In a statement, Amazon said it fired the employees for repeatedly violating internal policies,
not because they talked publicly about working conditions or sustainability.We support every
employee's right to criticize their employer's working conditions, but that does not come with
blanket immunity against our internal policies, all of which are lawful," the Seattle-based
company said.
Cunningham said the ruling proves that they were on the right side of history.Amazon tried to
silence us, said Cunningham. It didn't work.Because of the ruling, Amazon could be forced to
offer Cunningham and Costa their jobs back, pay them back pay and reimburse them for
expenses related to losing their jobs.
Cunningham and Costa, who were user-experience designers at Amazon, were the two most
prominent voices among a group of workers who wanted the company, which has a giant
carbon footprint, to take more steps to combat climate change and to stop doing business with
oil and gas companies. They held protests and spoke to the media about their concerns.
About a year ago, Cunningham and Costa planned a call between Amazon warehouse and
office workers to talk about unsafe conditions in the e-commerce giant's warehouses. Before
it could happen, Amazon fired both women. An Amazon executive quit in protest, saying he
couldn't stand by as whistleblowers were silenced.Amazon's treatment of workers has been in
the spotlight recently. Votes are currently being counted to determine whether workers at an
Alabama warehouse want to join a union. Organizers there want Amazon to pay workers
more, give them more break time and to be treated with respect.
Last year, Amazon also fired Christian Smalls, who led a walkout at a New York warehouse,
hoping to get the company to better protect workers against the coronavirus. Amazon said it
fired him for breaking social distancing rules. The New York attorney general, which is suing
Amazon for not protecting workers enough during the pandemic, alleges in her lawsuit that
the firing was meant to silence other workers from making health and safety complaints.
Amazon workers condemn unsafe, gruelling conditions at warehouse
Employees under pressure to work faster call on retail giant to improve conditions – and take
their complaints seriously. Workers at Amazon warehouses across the nation have long
complained about grueling working conditions. They say they have too few bathroom
breaks, which are all timed, excessive productivity goals, and an unsafe working
environment. The pandemic, they claim, only exacerbated problems as more people
turned to delivery.
If workers were to form a majority union, Amazon would be forced to bargain with it
for a contract that would cover things like pay, benefits, and productivity goals. Such
an outcome might seem like a long shot after last week's decisive defeat, where more
than 70% of ballots opposed the union—but it's not yet out of the question.
Union organizers said they plan to challenge the result by filing labor complaints
against Amazon, which they say violated labor laws during the election. Ultimately,
they are seeking a redo.
But in lieu of establishing a majority union, Amazon workers could join together in
two different ways to advocate for themselves.
Amazonians United
Even without setting up any kind of union, workers can still act collectively while
enjoying the protections of U.S. labor law. (See section seven of the National Labor
Relations Act, which states that employees “have the right to self-organization,” to
“bargain collectively through the representatives of their choosing, and to engage in
other concerted activities.”)
In other words, workers can form an internal group, or work with outside associations
and community organizations, to join together and negotiate with management.
Amazon workers in Chicago did this when they formed an independent group
called Amazonians United in 2019. Any attempt by employers to interfere, restrain, or
coerce employees from taking such actions would violate labor laws.
The right to self-organization is “ingrained in our labor laws,” Campos-Medina said.
“That’s why you see efforts all over the country with warehouse workers [beyond
Amazon] organizing and demanding improvements.”