Doing More with Less
On December 26th, Amazon announced yet another record-breaking Holiday sales season. While this news itself is noteworthy, and we shared updates about this in last month’s newsletter, what is especially important is Amazon picked, packed, and shipped these record-breaking orders with 20,000 less seasonal workers.
According to Citi Bank Analyst, Mark May, it is the first time in the history of Amazon that the company reduced the number of human warehouse labor compared to the prior year. Dating back to the 2012, $775M acquisition of Kiva Systems, a robotic warehouse systems company, Amazon has sought to increase automation into the supply chain and according to May “We’ve seen an acceleration in the use of robots within their fulfillment centers, and that has corresponded with fewer and fewer workers that they’re hiring around the holidays,”. According to a 2016 Deutsche Bank estimate, the installation of Kiva robots would save Amazon $880 million in fulfillment costs.
However, Amazon spokesman Ashley Robinson argued “It’s a myth that automation replaces jobs and destroys net job growth,” she said by email. “Our teams work alongside more than 100,000 robots at over 26 fulfillment centers worldwide and we are excited to continue increasing the technology we use at our sites while growing our global workforce.” Amazon continues to be the largest employer in the tech industry, and one of the largest in the United Sates with an estimated 550,000 employees.