Amazon Could Run Out of US Workers, Memo Reveals

A leaked internal memo from Amazon has suggested that the firm could deplete the US labour supply by 2024.

Last week Recode reported on the looming crisis facing Amazon, citing leaked internal research from mid-2021 that Recode had reviewed.

The research suggested Amazon could run out of people to hire in its US warehouses by 2024, placing its service quality, growth plans, as well as its e-commerce dominance, at risk.

Image credit: Amazon

Staff shortages?

Recode reported that Amazon could delay for a few years this looming labour crisis by raising wages and increasing warehouse automation.

But Amazon staff reportedly predicted that only a series of sweeping changes to how the company does business and manages its employees will significantly alter the timeline.

“If we continue business as usual, Amazon will deplete the available labour supply in the US network by 2024,” the research stated.

According to Recode, the report warned that Amazon’s labor crisis was especially pressing in a few locations, with internal models showing that the company was expected to exhaust its entire available labour 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.

Image credit: Amazon

Amazon’s internal report reportedly calculated the available pool of workers based on characteristics such as income levels and a household’s proximity to current or planned Amazon facilities; the pool does not include the entire US adult population, Recode reported.

Amazon spokesperson Rena Lunak reportedly didn’t refute the contents of the internal report Recode obtained but declined to comment on it.

Staff turnover

Companies with high levels of staff turnover (i.e. churn) often find it difficult to fulfil positions, as once people leave a firm due to whatever frustrations, they often will not return to that workplace. This usually only leaves school leavers as potential hires for these companies.

And Amazon has a worryingly high staff churn rate. The Guardian reported that before the pandemic, Amazon was losing about 3 percent of its workforce weekly, or 150 percent annually.

By contrast the annual average turnover in transportation, warehousing and utilities was 49 percent in 2021 and in retail it was 64.6 percent, less than half of Amazon’s turnover.

Amazon’s founder, Jeff Bezos, is worried, the Guardian reported.

It should be remembered that Bezos originally welcomed high staff turnover, fearing long-term employees would slack off and cause a “march to mediocrity”.

But in his final letter to shareholders as CEO last year, Bezos said the company had to “do a better job” for its employees. Amazon will commit to being “Earth’s Best Employer and Earth’s Safest Place to Work”, he wrote.

In the United States, Amazon in the second largest employer in America (behind Walmart), and has hired huge numbers of staff – both during and after the Covid pandemic.

But now Amazon is reportedly struggling to fill all its needed positions, and is contending with a US unemployment rate close to a 50-year low.

And Amazon is facing a number of unionisation efforts at its fulfilment centres and warehouses, with a Staten Island warehouse becoming the first US Amazon facility to vote for a trade union earlier this year.

Tom Jowitt

Tom Jowitt is a leading British tech freelancer and long standing contributor to Silicon UK. He is also a bit of a Lord of the Rings nut...

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