Amazon rejected a New York Times report claiming that it plans to replace 600,000 warehouse jobs with robots, calling the story “wrong” and “incomplete.”
On Tuesday the NYT wrote:
“Amazon’s U.S. work force has more than tripled since 2018 to almost 1.2 million. But Amazon’s automation team expects the company can avoid hiring more than 160,000 people in the United States it would otherwise need by 2027. That would save about 30 cents on each item that Amazon picks, packs and delivers to customers. Executives told Amazon’s board last year that they hoped robotic automation would allow the company to continue to avoid adding to its U.S. work force in the coming years, even though they expect to sell twice as many products by 2033. That would translate to more than 600,000 people whom Amazon didn’t need to hire.”
The NYT report cited internal documents and Morgan Stanley estimates suggesting automation could save Amazon up to $4B annually by 2027.
Amazon opened its most advanced warehouse facility in Shreveport, LA last year to serve as a template for future robotic fulfillment centers, with plans to copy the design in about 40 facilities by the end of 2027. The facility currently has around 4,000 employees, but once the robotic systems are installed it is projected to process 10% more items daily with 1,200 fewer employees.
Amazon says its automation strategy complements, not replaces, human jobs.
The company said in a statement that the documents viewed by NYT were incomplete and did not represent the its overall hiring strategy, but rather, reflected the viewpoint of one group inside the company. They went on to note that Amazon plans to hire 250,000 people for the coming holiday season, but declined to say how many of those roles would be permanent.
Udit Madan, who leads worldwide operations for Amazon, said in an interview that Amazon has a long history of using the operational savings from automation to create new jobs, such as its recent push to open more delivery depots in rural areas. Okay, but what happens when there's no more room to grow?
I personally believe that Amazon’s long-term strategy is to burn through human capital over the next decade until no one wants to work for them anymore, at which point it won’t matter, because robots will have taken over those jobs. “Employee satisfaction” and “retention” are temporary metrics at Amazon that won’t exist in ten years.
