Pushed by Pandemic, Amazon Goes on a Hiring Spree With out Equal

Pushed by Pandemic, Amazon Goes on a Hiring Spree Without Equal

SEATTLE – Amazon launched an extraordinary hiring surge this year, sucking in an average of 1,400 new employees per day and cementing its power as online shopping intensifies amid the coronavirus pandemic.

The hiring came at Amazon's Seattle headquarters, hundreds of warehouses in rural communities and suburbs, and countries like India and Italy. Amazon hired 427,300 people between January and October, employing more than 1.2 million people worldwide, an increase of more than 50 percent over the previous year. The number of workers is now approaching the entire population of Dallas.

The Spree has accelerated since the outbreak of the pandemic that upset Amazon's business and made it a winner of the crisis. As of July, the company employed around 350,000 people, or 2,800 a day. Most were warehouse workers, but Amazon has also hired software engineers and hardware specialists to power companies like cloud computing, streaming entertainment, and devices that were booming from the pandemic.

The scope of the hiring is even larger than it may seem, as the numbers do not take into account churn, nor do they include the 100,000 contract workers hired for the holiday shopping season. Nor do they contain what internal documents indicate as around 500,000 delivery drivers who are contractors and not direct Amazon employees.

Competitors – with both physical and online stores – are trying to figure out how to compete with Amazon on Black Friday and in a traditionally busy year-end sales period, but one that has been churned by the pandemic. According to the National Retail Federation, Amazon dominates e-commerce, with sales expected to grow up to 30 percent over last year's Christmas season.

Amazon's rapid employee growth is unrivaled in the history of the American company. It far exceeds the 230,000 employees that Walmart, the largest private employer with more than 2.2 million employees, hired in a single year two decades ago. The closest comparisons are the attitudes that entire industries made during wartime, such as shipbuilding in the early years of WWII or housing after the return of soldiers, say economists and corporate historians.

"It's hiring like crazy," Nelson Lichtenstein, a labor historian at the University of California at Santa Barbara, told Amazon. "No American company hired so many workers so quickly."

Even for a company that regularly sets new superlatives, Amazon's employee growth is a clear example of its power. At this pace, it is on track to outperform Walmart and become the world's largest private employer in two years.

Expansion is taking place as lawmakers and regulators in Washington and Europe sounded the alarm about technical might. This month, European Union regulators brought antitrust charges against Amazon, alleging that it improperly used its size and access to data to harm smaller retailers in its market. According to Amazon, merchants are thriving on its website and their share of sales is growing with the pandemic. The Federal Trade Commission is also reviewing the company. President-elect Joseph R. Biden Jr. is expected to continue to scrutinize tech giants.

"We are turning into an Amazon nation," said Margaret O’Mara, a history professor at the University of Washington and a contributing opinion writer for the New York Times.

Having employees in almost every state gives Amazon, which has warehouses across the country to be closer to customers, potentially an oversized political leverage, Ms. O’Mara said. She added that history has shown that there are risks when a region or country becomes too dependent on an employer, even though she said Amazon didn't get to that point.

Amazon has portrayed its hiring as a boon to workers who have been hit by the pandemic-triggered recession as unemployment has risen and restaurants, airlines and other businesses have suffered.

"At a time like this, it is even more important to offer jobs with industry-leading salaries and great health care, including newcomers and frontline workers," said Jeff Bezos, founder and chief executive of Amazon, last month when the company covered Blockbuster financial results.

Some government policies have supported Amazon's recent growth. In March, a $ 2 trillion taxpayer-funded stimulus package allowed local governments to shut down traditional retail stores in an effort to reduce the spread of the virus. When stores closed, demand for items on Amazon soared – and it was discontinued.

It was a Herculean task to add so many new workers so quickly to a pandemic. Many workers feared catching the coronavirus in warehouses, so Amazon put in a fleet of security measures to address Covid-19. And it has revamped its hiring engine based on technology and traditional recruiting.

This includes the promotion of training, performance and payment. Of the 810,000 workers in the US, around 85 percent are frontline workers in warehouses and factories earning at least $ 15 an hour. That's higher than traditional retail work, where the average sales rep makes $ 13.19 an hour, but lower than typical warehouse work. On Thursday, Amazon announced it would pay $ 300 for full-time workers and $ 150 for part-time workers.

To get this known, Amazon used recruiting agencies and advertised on television, billboards, and inboxes by highlighting sign-up bonuses of up to $ 3,000 and its precautions against Covid-19. In a recent TV ad, an Amazon employee wearing a mask said, "Safety, security, security!"

Hiring has been easy in many places as Amazon is one of the few employers with vacancies. In the week leading up to September 16, which the company dubbed “Career Day,” it said it received more than 384,000 applications in the US and Canada, or 38 per minute.

"This comes in the context of an unprecedented loss of jobs in other areas of the economy," said Ellora Derenoncourt, an assistant professor at the University of California at Berkeley who researched Amazon's minimum wage.

Amazon isn't the only beneficiary of how the pandemic has led people to buy online rather than in stores. Walmart has hired 180,000 people in the US since March, and online sales rose 79 percent in the most recent quarter. Target's e-commerce sales also rose 155 percent.

In that sense, this downturn was different from previous recessions, when all industries typically slowed, said Jed Kolko, chief economist at Indeed, the online job board. "That period was partly about a recession, but also about a rather dramatic shift in economic activity from some sectors to others," he said.

Just two years ago, Amazon employed fewer than 650,000 people. At that time, the company stepped on the brakes on hiring to focus more on profits. The pace of recruitment picked up again a year ago after the introduction of one-day shipping in the US. This was a tremendous effort requiring more warehouses and more workers to pick, pack, and sort packages.

When the coronavirus reached the USA in March, online shopping condensed the years of expansion into a few months. From April to June, Amazon sold 57 percent more items than a year earlier.

This led to a first pandemic of around 175,000 temporary workers. Many were hired to replace employees who had taken indefinite unpaid leave at the start of the pandemic. To attract new employees, Amazon offered its employees an additional $ 2 an hour and increased overtime pay. It was said that the additional wages were not a “risk payment” but an incentive.

According to Ardine Williams, vice president of people development, Amazon had the infrastructure to grow quickly. When Covid-19 kept people like their elderly parents in place for safety reasons, consumers turned to e-commerce, accelerating the need to hire more employees.

"Some of that growth is clearly planned," she said. "However, I think that the number of employees has really been fueled by customer demand."

Over the summer, Amazon converted most of the 175,000 contract workers to permanent employees and ended the additional raise for all workers. Since then, it has continued with waves of attitudes.

The company has also nearly tripled the number of U.S. warehouses used for last mile deliveries this year, said Marc Wulfraat, founder of logistics consultancy MWPVL International, which tracks Amazon's operations. The delivery drivers are usually contractual partners, so Amazon does not include their numbers in official documents.

"They have built their own UPS in the past few years," said Wulfraat. "This rate of change has never been seen before."

Ms. Williams said Amazon has also built relationships with downsizing companies like Uber, American Airlines and Marriott to encourage recruitment.

"We hired a group that did nothing but affiliate with organizations that took people off, be it temporary or permanent," she said. "This enabled us to hire qualified, high-quality workers and quickly and easily convert them into opportunities that were appropriate at Amazon."

The effort was supported by 1,000 technology workers who create software for Amazon's human resources department. Many are building portals and algorithms that automate the hiring process, she said. Potential employees can find jobs, apply and be hired entirely online without speaking to a single person.

In order to grow so strongly, Amazon must also think long-term, said Ms. Williams. As a result, the company has already worked with preschools to lay the groundwork for technical training. "As our hiring demand unfolds over the next 10 years, this pipeline is there and ready."

Michael Corkery contributed to the coverage from New York.