Amazon Plans to Replace 500,000 People With Robots

Amazon.com Inc. (NASDAQ: AMZN | AMZN Price Prediction) hired over 200,000 part-time workers to help with holiday sales. That is good news for the overall economy. It indicates that people plan to spend briskly over the holidays. That, in turn, will help Amazon’s e-commerce top line. However, those people may not get jobs next year, and many full-time employees may find themselves out of work as well.

The New York Times got ahold of confidential Amazon documents that indicate the company plans to automate huge numbers of tasks that are done by people. Robots will take over their workload. Management also told its board that it expects a surge in orders, reaching twice the current level by 2033.

“Robots” is another word for AI-based automation that can replace most of the people who work in its massive warehouses. These are central to Amazon’s ability to deliver items to customers in one or two days. By most estimates, Amazon has 350 warehouses worldwide and another 1,200 logistics facilities.

The Times quoted Daron Acemoglu, a professor at the Massachusetts Institute of Technology who has a Nobel Prize in economics. He said, “Nobody else has the same incentive as Amazon to find a way to automate.” To accomplish this, the company’s e-commerce division will need nearly a million robots. Presumably, the plan will save hundreds of millions of dollars a year.

Amazon indeed has a powerful incentive to set up a more automated system. Its North American e-commerce margins are thin. In the most recent quarter, revenue for the region was $100 billion and operating income was $7.5 billion.

Amazon is uniquely positioned for the plan. It is among the early leaders in artificial intelligence. Up against Meta, Alphabet, Microsoft, and OpenAI, it plans to invest $100 billion in the technology this year. That is a staggering amount, even for the second-largest company in the United States as measured by revenue. It can recoup at least some of that AI investment by significantly cutting its e-commerce workforce.

Amazon Stock Price Prediction and Forecast 2025-2030