Amazon.com Inc. (NASDAQ: AMZN | AMZN Price Prediction) plans to add an extraordinary number of workers in the United States and Canada. The 100,000 new employees are about the same number as the entire population of Green Bay, Wisconsin, another sign of the rapid expansion of the e-commerce and cloud computing juggernaut. The decision means Amazon almost certainly will post another surge in revenue and earnings in the final quarter of the year, when national retail sales generally shine. It is also more bad news for America’s brick-and-mortar retailers.
Amazon announced that new employees will have a mix of full-time and part-time jobs. They will be paid at least $15 an hour, which is above the minimum wage in most states. The new workers will get $1,000 signing bonuses in some cases. Many also have access to “Career Choice,” an employee training program meant to add to worker skills. This program pays as much as 95% of the tuition for people who want education in “high demand fields.” Benefits will include 50% matches for 401(k) plans and up to 20 weeks of parental leave. All in all, for relatively low-paid jobs, these are good benefits.
One reason Amazon needs the workers is its rapid expansion in distribution centers. It already has opened 100 buildings this month for these purposes, the company said. These hubs help get inventory closer to customers, which presumably makes it easier for Amazon to ship products more quickly to people who buy them. To support this system, Amazon announced last week that it also would add 33,000 corporate and technology jobs.
The fourth quarter is when retailers usually hire additional workers. This is in anticipation of a surge in sales for the holidays. Some of the weakest large retailers are unlikely to match new worker figures from recent years. Between the recession, the shutdown of stores due to the COVID-19 pandemic and the rise of e-commerce, store traffic will be down from recent years.
[nativounit]
Amazon’s fourth-quarter revenue last year was over $87 billion. At the company’s current growth rate, which was 40% in the second quarter, Amazon’s fourth-quarter revenue could be as high as $120 billion. That means its top line will start to approach Walmart’s global figure of $514 billion last year. Walmart is the largest company in the United States by that measure.
The hiring binge is another reason Amazon is the second most valuable company in America, with a market cap of $1.56 trillion, behind only Apple’s $1.92 trillion. Retailers have been desperate to slow Amazon’s growth so that its share of the industry’s sales would not balloon so high that they can never recover. The news of Amazon’s employment additions means that chance is over.
With the new, additional workers, Amazon’s employee base will reach over 1.1 million people, which is about the size of San Jose, California, the 10th largest city in America.
[recirclink id=737593]
[wallst_email_signup]
Top Gaining Stocks
Top Losing Stocks