Robots replaced Amazon 20,000 workers
Pre-Christmas sales are coming, the hottest time of year for all retailers. Last year, in one month from the end of November to the end of December, Amazon sold goods for $ 40 billion. Cyber Monday became the hottest day, with sales of various gadgets. In 2017, he for the first time walked around Black Friday and even Amazon Prime Day, and brought the company about $ 2.7 billion (140 million of goods sold). This year, the main online store expects to break through the $ 3 billion mark. But people will no longer be helping to help it.
After the fiasco with demands for a salary increase of up to $ 15 per hour, the IT giant finally decided that robots were more reliable. Nobody demands an increase in their salaries, and they are not going to the trade unions. Therefore, this year, for the first time in the entire history of Amazon, despite the huge growth of the online supermarket, fewer people will start working in it ...
To understand how many employees approximately this year the company was “crowded out” by robots, you can do a simple calculation. A few days ago, in early November, Amazon began to recruit people to its warehouses for temporary work - to help with the two busiest months. In 2016 and 2017 in the USA they needed 120 thousand people (almost a third of the total number of employees).
Since then, Amazon has expanded very seriously. Shares of the company grew by 57%, sales through the site - by 32%, and more than 50% of all online purchases of Americans are now conducted through the online store. Since 2016, the number of permanent employees has grown almost one and a half times - due to the opening of dozens of new warehouses.
If you compare the data for July-September 2018 with the same information from the previous year, the company's revenue increased from $ 44 billion to $ 57 billion. Profits increased almost five times, to $ 2.8 billion per quarter (though mainly due to AWS , the online store sometimes shows even a loss). In general, the growth is stunning, and Bezos knowingly received the title of the richest man in history.
At the same time, for this Christmas season, Amazon is going to hire "only" 100 thousand temporary employees. This information was collected by the Citi group , analyzing the company's open data on recruitment. Despite the expected increase in the number of purchases in the store in November-December, at least 15% compared with last year, Amazon will hire 20,000 fewer people. The reason is an increase in the automation level of logistics centers. This year, more robots will be used to transport and select goods. Citi analyst Mark May explains:
We see that they accelerate the introduction of robots in their areas. Even compared to Prime Day in July, this has greatly accelerated. 2018 will be the first year in which the company will hire fewer temporary workers than before. If I were a warehouse employee, I would start thinking about alternatives.
Machines for Amazon are being developed by Kiva Systems, which Bezos bought in 2012 for $ 775 million (later renamed Amazon Robotics). Her orange “rumba”, moving shelves with goods, began to appear in warehouses at the end of 2014, as a test.
By the middle of 2016, it became clear how these robots can actually help the online store. Small metal assistants learned in 15 minutes to perform more tasks on sorting, collecting, packing and shipping goods, than a human employee could do in an hour. Due to this, the company had already reduced operating expenses at 13 warehouses by 20% - at $ 22 million per warehouse (here we must take into account that Amazon’s warehouses are gigantic, each like twenty football fields).
Moreover, the advantages of robots were not only in their speed - and the lack of requirements for raising the minimum wage. It turned out that in the room with them you can save on heating. Machines are not as demanding as work people are, and the cold in the warehouse is even pleasant for them. Plus, in a warehouse equipped with robots for each square meter you can potentially hold up to 50% more goods - by reducing the distance between the racks. Small points need much less space to move than people.
In June 2016, Deutche Bank predicted that simply installing such machines in all 110 large warehouses of the company would allow Amazon to save $ 2.5 billion. Since then, the online store has been doing just that. The number of "robotic" warehouses for two years has doubled. And most importantly, almost every Amazon employee now knows that if he is unhappy with something, he will happily be replaced by a robot.
Amazon never mentions how many people in the warehouses it manages to replace with machines. Instead, in its communication with journalists, the company focuses on how many new jobs it creates each year. About why this year she refused a minimum of twenty thousand people, the company told reporters the following:
Our warehouse teams are now working hand in hand with more than 100,000 robots at 26 execution centers. We are proud to use this new technology, and are pleased to continue its development, at the same time increasing the total number of our employees.
This year, Amazon expects to raise at least $ 8 billion for Thanksgiving, Black Friday, Cyber Monday and Christmas. Early offers for Black Friday have already started . Combined with a decrease in the cost of seasonal workers and hidden reductions in bonuses for old storekeepers, at the end of 2018 the IT giant could reach a new level of profitability. And Jeff Bezos, who this year has already increased his wealth by $ 40 billion, will further increase his lead from number two , while he is busy with his toilet bowls.
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