According to an internal memo leaked to Recode, Amazon will likely run out of potential employees for its US warehouses by the year 2024. The memo featured internal research from 2021 that predicted an impending labor crisis for the e-commerce giant that would hit some areas faster than others. For example, it estimated that Amazon would have exhausted its labor supply in Phoenix, Arizona by the end of 2021 and in California’s Inland Empire by the end of 2022. It calculated the available pool of workers using factors such as income levels and proximity to current or planned Amazon facilities.
The report urged the company to take steps to address the future labor gap, such as raising wages to maintain the existing workforce and attract more new hires. It also proposed to increase automation in the warehouses. “If we continue as usual, Amazon will exhaust the available labor supply in the US network by 2024,” the report authors wrote.
In a statement to Engadget, an Amazon spokesperson said the leaked document is not an accurate assessment of the hiring situation. “Many draft documents have been written on many topics within the company that are used to test assumptions and look at different possible scenarios, but are not then escalated or used to make decisions. This was one of them. It doesn’t reflect the real situation, and we continue to hire good personnel in Phoenix, the Inland Empire and across the country,” wrote Rena Lunak, Amazon’s director of global operations and field communications.
Automation is something Amazon has already invested heavily in by acquiring Kiva Systems in 2012. But according to a Wired study from last year, Amazon’s warehouse robots are incapable of performing advanced fulfillment tasks that only a human worker can perform.
Human workers were once an abundant resource of the company. The tech giant is the second largest private employer in the US and the largest private employer in a number of US states and cities. The company announced plans last fall to hire 125,000 employees, roughly equivalent to the population of Savannah, Georgia. But the new hires appear to be largely replacing workers who have been terminated or resigned. Amazon’s turnover rate is about 150 percent per year, or twice that of retail and logistics as a whole, a New York Times survey found last year.
As Recode points out, Amazon’s failure rate is even worse in Phoenix and the Inland Empire. It also has to compete with major stores like Walmart and Target, which now offer competitive wages to those with warehouse experience. “We hear a lot [Amazon] workers say, ‘I can just cross the street to Target or Walmart,’” Sheheryar Kaoosji, co-executive director of Inland Empire’s Warehouse Worker Resource Center, told Recode.
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