Amazon: An Introduction
Amazon: An Introduction
When one thinks of Amazon, they often associate the brand with fast next-day delivery as well as its wide range of products available at the click of a button. The cost of this is high; workers in its facilities often report horrendous working conditions and being fired for missing quotas. However, Amazon’s abysmal track record of how it treats its workers are often ignored by the public in favour of its sheer accessibility and convenience. How did Jeff Bezos manage to catch up from entering the internet business boom in the 90s? Is such a trade-off between welfare and affordability really necessary? How is this massive corporation dealing with the economic fallout of the Covid-19 pandemic?
The origins of Amazon
Having failed to jump onto the dotcom bubble in the early 90s, D.E. Shaw and Co’s then-vice president Jeff Bezos left his position at the company and moved to Seattle. Like Alibaba, Amazon had its humble beginnings operating out of Bezos’s home with the name Cadabra, Inc., but this title was quickly discarded in favour of its current name after a lawyer mistook it for “Cadaver”. Within its first 2 months of business, Amazon had begun selling to all states in the USA and over 45 countries, with sales hitting $20,000 a week. Amazon managed to survive the dotcom bubble burst at the turn of the millennium, and grew from 30,000 employees in 2011 to 798,000 in 2019. Annual profits at Amazon currently stand at close to 26 billion USD and, prior to the Covid-19 pandemic, showed no signs of slowing down.
The price of affordability
Amazon’s successful business model can be attributed, in part, to its poor treatment of the people it employs. On paper, $15 an hour plus employee benefits appears enticing. However, the main issue with Amazon is that workers simply cannot keep up with the increasingly-strenuous workload expected of them. With only one error permitted per 2200 items processed, as well as seemingly automatic dismissals based on missed quotas, employees often complain that they are treated like machines. This is coupled with workers being punished for injuries as well as medical compensation claims being denied without reason. This lack of guarantee of proper medical care has already claimed lives; 2 people have already died after going into cardiac arrest on company grounds. It was also reported that the deaths could have been prevented had sufficient medical attention been provided; one of the fatalities had reportedly been lying on the floor for 20 minutes before he was found, where a few days ago it took 2 minutes for the warehouse management to talk to him after he had placed a product into the incorrect storage bin. With such practices prevalent in facilities around America, it is unsurprising that the worker turnover rate is incredibly high. Can $15 an hour plus benefits compensate for dying on the job? The countless strikes held by former disgruntled employees appear to give a clear answer.
Pandemic, Pressure, Panic
With the Covid-19 pandemic kickstarting a global panic, companies worldwide have found their supply chains disrupted, Amazon included. It is becoming increasingly difficult to maintain a worldwide delivery service if employees fall sick and are unable to keep up with packaging quotas. Production in China, where Amazon sources a majority of its products from, has dropped to its lowest since 2004, causing a lack of availability of goods on the online marketplace. Fears of the virus spreading have also reduced consumer spending, and the resulting lack of capital flow has caused the economy to slow down. According to The Economist, the market value of listed firms worldwide have already been slashed by approximately 7 trillion USD. This has led to quick measures taken by said firms to minimise losses. Amazon has already banned all non-essential trips overseas to limit the spread of the virus. Furthermore, the corporation has directed global employees to work from home if possible, and have provided 2 weeks of extra paid time-off for all employees who test positive for Covid-19 or have been quarantined. But while these measures can help to slow the spread of the pandemic, the grim reality is that employees still have to be on the ground to help put items into boxes for worldwide delivery processes to be maintained.
It is a shame that Amazon has only taken action to improve worker welfare in the face of a global pandemic, and not before. Only time will tell if Amazon will be able to maintain profits while simultaneously improving the treatment of its workers. Until then, the corporation will have to endure the economic pressure applied by the pandemic’s threats to its workforce as well as pushback from its employees arising from abysmal workplace conditions.
by Ronald Poh