Amazon embarks on 75K hiring push to accommodate logistics growth

Dive Brief:

  • Amazon aims to hire 75,000 fulfillment and logistics workers across the U.S. and Canada, the company announced Thursday. “Amazon’s fulfillment and logistics network is continuing to grow across the country,” a spokesperson said via email, “and we are hiring to accommodate that growth.”
  • Average pay will start at more than $17 per hour, and many locations will issue sign-on bonuses of up to $1,000. The company is also offering new hires a $100 benefit, if they come to work already vaccinated for COVID-19, according to the announcement.
  • For Amazon, this hiring effort targets two facility types: fulfillment centers and delivery stations, the spokesperson said. The company’s delivery center footprint, in particular, is undergoing a rapid growth spurt.

Dive Insight:

Amazon is making a hiring push as talent is becoming more expensive. Higher demand for e-commerce has pushed up demand for e-commerce workers, making the job market competitive among employers.

A study by Randstad US, published in January, said salary increases were likely across warehouse and logistics manager roles, and the former may see wages rise to as high as $43.21 an hour.

Labor-related costs have also increased due to the pandemic-driven need to social distance. Amazon continues to incur these expenses across its fulfillment network, globally. Amazon CFO Brian Olsavsky said on a recent earnings call that COVID-19 related operating costs could amount to $1.5 billion in Q2 alone.

Amazon has been bullish on its vaccination program, be it through sign-on incentives or providing access at its facilities. The company has held on-site vaccination events in 29 states, reaching more than 300,000 employees and contractors, said Olsavsky.

Workforce challenges such as vaccination and social distancing that add to the already increasing complexity in logistics has spurred an outsourcing trend, as noted by XPO Logistics.

“Outsourcing has been a consistent trend for years, but it accelerated as a result of the pandemic,” CEO of XPO Europe Malcolm Wilson said during XPO’s most recent earnings call. “Large companies have become more aware of both the critical importance of supply-chain continuity … and the potential vulnerability of handling logistics completely in-house.”

Amazon, with its heft, is an exception to the outsourcing trend.

By year’s end, Amazon is expected to have 506 delivery centers, according to a forecast by MWPVL, a consulting company that tracks the growth of Amazon’s operation. That’s up from 159 locations at the end of 2019 and 337 at the end of 2020.

Amazon’s spokesperson described delivery centers as facilities “where packages are organized by route and put onto the various vans/trucks for final customer delivery.” They are fed by sortation centers, which also pass parcels to the Postal Service and third-party-logistics providers.

Working to bring logistics further in house shows Amazon is following a similar model to other big logistics providers, such as UPS and FedEx. The growth in e-commerce is a catalyst for capacity expansion, though not all driven by the pandemic.

International e-commerce at Amazon grew 50% in Q4 2020, and then 50% again in Q1 this year, Olsavsky said. But the segment “has been tripling their prior growth rate in revenue anyway,” looking at pre-pandemic numbers, as well, he added.

Matt Leonard contributed to this report.

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