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Amazon to Keep Most of the Jobs It Added During Pandemic -- Update

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05/28/2020 | 05:43pm EDT

By Sebastian Herrera

Amazon.com Inc. will keep most of the U.S. jobs it added to meet demand in March and April as it sees the surge in online orders during the pandemic as a harbinger of lasting demand for its products and services.

Amazon said Thursday it will give 125,000 of the 175,000 temporary hires the option of staying on full time, signaling it expects the recent growth to continue. The company said the jobs add to a nonseasonal U.S. workforce -- both full-time and part-time -- that it recently put at more than 500,000.

As companies across industries have shed millions of jobs during the pandemic, Amazon, Walmart Inc. and others that provide essential goods have been among the few adding workers. Most, however, were temporary hires.

U.S. unemployment surged to a record 14.7% last month, and payrolls dropped by a historic 20.5 million workers, wiping out a decade of job gains in a single month.

Amazon's move to retain more than 70% of the employees it added as the pandemic took hold points to the strength of large retailers and technology companies that have weathered the crisis, as well as to an accelerated shift to online shopping.

"As we have seen sustained demand ongoing, we expect to continue to see a lot of demand from customers throughout the rest of the year," Dave Clark, Amazon's senior vice president of world-wide operations, said in an interview.

The company's decision is good news for Erick Womack, who began to work at an Amazon warehouse in the Gainesville, Fla., area this month after losing his job at a third-party billing firm.

Mr. Womack, who has been working on a temporary basis, had hoped to stay on permanently. After he lost his prior job, he applied for administrative assistant roles at more than 30 companies but hadn't heard back.

"I don't have to worry now about going on a job hunt any time soon," said Mr. Womack, who is 27 years old. "That uncertainty goes away."

Amazon began its hiring spree in March after people sheltering in place to prevent the spread of the coronavirus flooded it with orders for toilet paper, food, household products and other necessities.

Grocery chains Kroger Co. and Albertsons Cos. disclosed plans in March to hire tens of thousands of workers to meet the surging demand. The companies say they aren't sure how many of those employees will stay on permanently.

Walmart, the nation's largest private employer, has added more than 235,000 workers since mid-March, most in temporary positions. A company spokeswoman said the retailer has converted some new hires to permanent roles and expected to do so with "many more" in the future, although she didn't specify how many.

"We're glad we've been able to offer bridge employment to so many displaced workers," the spokeswoman said. "We're seeing many return to their respective industries as parts of the country reopen and expect that to continue."

The 125,000 positions at Amazon are more than it would typically add during those months, a spokeswoman said, without providing details. Mr. Clark said Amazon was able to bring on so many workers in such a short period of time because many hiring processes, such as interviews, happened virtually.

As demand surged, some workers at Amazon's more than 500 U.S. warehouses stopped showing up. Some said they were fearful of working during the pandemic and others decided to make use of leave policies the company put in place.

Workers at several warehouses have held walkouts to protest what they said are unsafe working conditions. While Amazon hasn't said how many employees have been infected with the virus, crowdsourced estimates from worker coalitions are in the hundreds, and several workers have died from the virus.

Mr. Clark said Amazon views total virus cases at its warehouses as a "relatively unimportant measure." Instead, he said the company puts greater emphasis on the number of workers who have to be placed in quarantine when there is a case -- tallies, he said, that have been below averages for the communities where Amazon warehouses are located.

Amazon is also concerned about the privacy of worker families, Mr. Clark said.

Amazon said it is incurring about $4 billion in coronavirus-related expenses, including for personal protective equipment, cleaning of facilities and an initiative to test employees for the coronavirus. Mr. Clark said safety precautions such as wearing masks and setting up physical barriers between employees will go on for at least the next 12 months. Some policies, such as temperature checks, could be permanent, he said.

Retailers typically hire temporary workers at warehouses and stores in the run-up to the holiday shopping season. Though some are normally given the chance to continue permanently once the season is over, it is unusual for many to be kept. Demand during the pandemic has been near peak holiday levels for Amazon, Walmart and other retailers.

The Amazon spokeswoman said the 125,000 figure is based on the long-term need of warehouses. She also said the 175,000 temporary hires included delivery drivers who work for third-party companies, which make their own decisions about how many to keep.

Although the company has gained better control of demand, "we still definitely have a need for more employees," the spokeswoman said.

Write to Sebastian Herrera at Sebastian.Herrera@wsj.com

 

Stocks mentioned in the article
ChangeLast1st jan.
AMAZON.COM, INC. 1.72% 2442.37 Delayed Quote.29.94%
KROGER 1.75% 32.62 Delayed Quote.12.52%
WALMART INC. 0.30% 124.06 Delayed Quote.4.39%
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Financials (USD)
Sales 2021 127 B - -
Net income 2021 1 915 M - -
Net Debt 2021 13 072 M - -
P/E ratio 2021 13,4x
Yield 2021 2,01%
Capitalization 25 645 M 25 645 M -
EV / Sales 2020
EV / Sales 2021 0,30x
Nbr of Employees 435 000
Free-Float 40,7%
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Number of Analysts 26
Average target price 34,55 $
Last Close Price 32,62 $
Spread / Highest target 28,8%
Spread / Average Target 5,92%
Spread / Lowest Target -20,3%
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NameTitle
W. Rodney McMullen Chairman & Chief Executive Officer
Michael Joseph Donnelly Chief Operating Officer & Executive Vice President
Gary Millerchip Chief Financial Officer & Senior Vice President
Yael Cosset Chief Information Officer & Senior Vice President
Bobby S. Shackouls Independent Director
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