In his drive to create the world’s most efficient company, Jeff Bezos discovered what he thought was another inefficiency worth eliminating: hourly employees who spent years working for the same company.
Longtime employees expected to receive raises. They also became less enthusiastic about the work, Amazon’s data suggested. And they were a potential source of internal discontent.
Bezos came to believe that an entrenched blue-collar work force represented “a march to mediocrity,” as Da Niekerk, a former Amazon executive who built the company’s warehouse human resources operations, told The Times, as part of an investigative project being published this morning. “What he would say is that our nature as humans is to expend as little energy as possible to get what we want or need.”
In response, Amazon encouraged employee turnover. After three years on the job, hourly workers no longer received automatic raises, and the company offered bonuses to people who quit. It also offered limited upward mobility for hourly workers, preferring to hire managers from the outside.
As is often the case with one of Amazon’s business strategies, it worked.
Turnover at Amazon is much higher than at many other companies — with an annual rate of roughly 150 percent for warehouse workers, The Times’s story discloses, which means that the number who leave the company over a full year is larger than the level of total warehouse employment. The churn is so high that it’s visible in the government’s statistics on turnover in the entire warehouse industry: When Amazon opens a new fulfillment center, local turnover often surges.
Workers without power
The new Times story — by Jodi Kantor, Karen Weise and Grace Ashford — is full of fresh details, including internal company statistics, posts from internal message boards and interviews with Amazon workers and executives, both current and former. The story focuses on JFK8, a sprawling Staten Island warehouse, as it coped with the coronavirus pandemic and the surge in demand for online shopping.
If nothing else, I recommend you read the article to hear the story of the Castillo family. While Alberto Castillo, a 42-year-old husband, father and Amazon worker, was in the hospital suffering from Co-related brain damage, the company sent him an email ordering him back to work. “Haven’t they kept track of what happened to him?” his wife, Ann, wondered.
My goal in today’s newsletter is to highlight a larger economic trend that Amazon reflects: Many Americans today are strikingly powerless while they are on the job. Their employers treat them as “an expendable work force,” to quote a phrase used by an Amazon employee in the story. They often lack the leverage to demand higher pay or different working conditions.
At Amazon, workers sometimes find out about a new shift only the day before, scrambling their family routine. When workers want to get in touch with human resources by phone, they must navigate an automated process that can resemble an airline customer-service department during a storm. Employees are constantly tracked and evaluated based on their amount of T.O.T., or time off task. One employee who had earned consistent praise was fired for a single bad shift.
Even so, work at an Amazon warehouse is often better than the alternative. JFK8 now pays at least $18.25 an hour, which translates to about $37,000 a year for a full-time worker. After decades in which pay has failed to keep pace with economic growth — except for the upper middle class and above — many blue-collar workers do not have a better option.
There is no reason to think American workers’ lack of bargaining power is on the verge of changing. Labor unions have a long track record of giving workers more power, but most Amazon employees have shown little interest in joining a union. A booming economy can also help workers, but its effects tend to be more fleeting.
‘Earth’s best employer’
In recent months, as Bezos has prepared to step down as chief executive, he has suggested that he wants to change Amazon’s workplace culture. “We have always wanted to be Earth’s most customer-centric company,” he wrote to shareholders in April. Now “we are going to be Earth’s best employer and Earth’s safest place to work.”
In response to The Times, Amazon said employee turnover was “only one data point” and that its internal surveys show high worker satisfaction. The company also said it was changing its policy so that workers would never be fired for one bad day.
Still, it is not at all clear that Amazon will change its basic approach to blue-collar work, because that approach has brought the company many advantages. The constant churning of workers has helped keep efficiency high and wages fairly low. Profits have soared, and the company is on pace to overtake Walmart as the nation’s largest private employer. Bezos has become one of the world’s richest people.
Many people want to believe that being a generous employer is crucial to being a successful company. But that isn’t always true.
Other Big Stories
Two top executives stepped down from Lordstown Motors, an electric truck start-up, amid multiple investigations.
An American father and son pleaded guilty in Japan to helping Carlos Ghosn, the former Nissan chief facing fraud charges, to flee that country in 2019.
The southwestern U.S. is entering a severe heat wave that could aggravate wildfires and overwhelm power grids.
The veteran CNN anchor Christiane Amanpour told viewers that she had been diagnosed with ovarian cancer but that she had “had successful major surgery to remove it.”
Baseball Reference, the go-to internet source about the sport, has drastically expanded its accounting of the Negro leagues. Black players were excluded from the major leagues until 1947.
Colorado wildlife officials found a litter of gray wolf pups — the state’s first since the 1940s, when they were hunted nearly to extinction.
Opinions
Doing I.V.F. without a partner shouldn’t be this hard, Alicia Lombardini writes.
Morning ReadsThe legacy of “Yan Can Cook”
Martin Yan began hosting his show “Yan Can Cook” on PBS in the ’80s. Though cooking shows are now commonplace, Yan was one of a handful of chefs, alongside Julia Child and Jacques Pépin, to regularly reach a national audience at the time. With his encouraging demeanor and a catchphrase — “If Yan can cook, so can you!” — he introduced many American households to Chinese flavors.
“Chinese food and Chinese culture were not as well received” when his show started, he told The Times. He avoided including dishes that people might’ve deemed too different: “I do either steamed, deep-fried or stir-fried,” he said.
Still, he used his platform to spotlight local Chinese businesses, like an egg roll factory and dim sum restaurants. And through the show, he established a successful career writing cookbooks and running restaurants in China and California.
Yan’s program remains one of the longest-running American cooking shows and is syndicated around the world. But he has also adapted to the times: These days, the 72-year-old can be found on YouTube, livestreaming himself cooking from home. Read Priya Krishna’s profile of the chef here. — Sanam Yar, Morning writer
