Amazon To Hire 100,000 Workers To Meet Unexpected Virus-Driven Demand

Unintended consequences. But if any enterprise on earth were expected to benefit from a global pandemic, few would be surprised to learn that enterprise is Amazon. JL

Dana Mattioli reports in the Wall Street Journal:

Amazon was out of stock on popular items, especially household staples, and some deliveries would take longer than usual. In some markets, customers couldn’t place same-day orders usually used for groceries from Whole Foods. (To meet the unexpected demand) Amazon plans to hire an additional 100,000 employees in the U.S. The tech giant’s decision to go on a hiring spree and boost worker pay shows the dual challenge companies such as Amazon face as they seek to meet surging demand for food and key household items and also take care of employees at the front lines of the pandemic.

Amazon.com Inc. plans to hire an additional 100,000 employees in the U.S. as millions of people turn to online deliveries at an unprecedented pace and Americans continue to reorient their lives to limit the spread of the new coronavirus.

Amazon plans to deploy the new workers to fuel its sprawling e-commerce machine and is raising pay for all employees in fulfillment centers, transportation, stores and deliveries in the U.S. and Canada by $2 an hour through April. In the U.K., it will go up £2 ($2.45) per hour and approximately €2 ($2.24) an hour in many EU countries, according to the company. Amazon now pays $15-per-hour as a starting wage to workers in its fulfillment centers around the U.S.

The tech giant’s decision to go on a hiring spree and boost worker pay shows the dual challenge companies such as Amazon face as they seek to meet surging demand for food and key household items and also take care of employees at the front lines of the pandemic.

Amazon employed nearly 800,000 full and part-time employees as of Dec. 31.

Countries around the world this week took more drastic measures to contain the spread of the virus, closing schools for tens of millions of children and ordering citizens to stay home except for essential functions. President Trump advised Americans to avoid bars and restaurants and gathering in groups larger than 10. France announced a lockdown, and San Francisco ordered residents to stay home.

As learning, e-commerce and work all shift to at-home settings, Amazon’s move to add to its ranks highlights another way the crisis has forced change upon businesses and markets. Large, well-capitalized companies such as Amazon are moving to meet an extraordinary uptick in orders. Slack Technologies Inc. and Microsoft Corp. are seeing interest in their collaborative-work platforms.

“Amazon is big enough and powerful enough and decisive enough to take up a significant amount of the slack being caused by all of the shutdowns,” said Mark Cohen, a former chief executive of Sears Canada Inc. and director of retail studies at Columbia University’s business school. “This is an enormous engine of distribution that has been growing for many years and investing ahead of its own needs.”

Schools are turning quickly to online educational portals that have never been used at such an extensive scale. Broadband use in some areas has been swamped as many turn to home networks for work and entertainment streaming. Longstanding conventions for entertainment have been temporarily abandoned, such as waiting periods for films in theaters to become available digitally. Comcast Corp. ’s Universal Pictures said Monday it is making certain movies that are still in theaters available to watch at home starting Friday.

More customers are turning to online shopping for everything from grocery delivery to paper towels, cleaning supplies and daily needs. Amazon, which also owns grocery store chain Whole Foods, was one of the companies Mr. Trump mentioned Sunday during his update on the coronavirus outbreak. Amazon accounts for 39% of all online orders in the U.S., according to eMarketer, and is shouldering a lot of those needs.

“We are seeing a significant increase in demand, which means our labor needs are unprecedented for this time of year,” said Dave Clark, Amazon’s senior vice president of operations in a memo reviewed by The Wall Street Journal.

Food-delivery companies such as Grubhub Inc. and Postmates Inc. have seen robust orders even as the potential for widespread restaurant closures could slow activity. When the pandemic first hit in China, food-delivery orders increased initially, but companies experienced a dropoff as restaurants shut after about a month, according to research-firm NPD Group Inc.

The 100,000 new Amazon jobs, in locations across the U.S., will come at a time when broader retail is contracting and retailers rethink operating physical stores during a pandemic. Apple Inc., Nike Inc. and Lululemon Athletica Inc., among others, have announced temporary store closures.

Employees in the hospitality, entertainment and restaurant industries are also facing a crunch with cities such as New York and Washington, D.C. imposing restrictions on gathering in public places.

On Wednesday, Amazon expanded its sick-leave policy to include part-time warehouse workers and set up a relief fund, with an initial $25 million for delivery partners such as drivers and others affected by the outbreak.

The company earlier eased its policy for unpaid time off, offering workers the option to take unlimited unpaid time off through the end of March without penalties.

The ramp-up in online deliveries comes as Amazon told all of its workers globally to work from home if their jobs would allow for it.

The company earlier eased its policy for unpaid time off, offering workers the option to take unlimited unpaid time off through the end of March without penalties. The change affected workers in offices, stores, warehouses and other locations that require a physical presence.

With people trying to limit their exposure, customers will rely on companies with e-commerce arms and the ability to rapidly replenish inventory more than ever.

The execution so far has been spotty. Struggling with demand, many retailers have had to cancel portions of online orders or delay their shipping dates of items such as hand soap until late April. The delivery-time windows of online grocers has surged to more than a week in many cities where customers were accustomed to next-day delivery.

Some online retailers are displaying items as available in their search results that are out of stock, and many have had to grapple with supply-chain issues as customers from all over the world are demanding the same items at the same time.

Amazon said Saturday that it was out of stock on some popular items, especially household staples, and some deliveries would take longer than usual. In some markets, customers couldn’t place same-day orders usually used for groceries from Amazon-owned Whole Foods stores. The company has also had to combat third-party sellers on the site participating in price gouging on in-demand items such as hand sanitizer and face masks.