Amazon found it necessary to raise wages and increase the use of incentives to fill some of its vacant positions, which led to an increase in the cost of its fulfillment network.
“We certainly see stronger demand for workers,” Amazon CFO Brian Olsavsky said in a conference call with reporters. “So far, we have had great success in hiring them, and our wages and benefits are very competitive. So we are watching it carefully. But this may be one of the bigger factors of inflation in our business right now. .”
Later, in a conference call with analysts and investors, Olsavsky cited this question when answering questions about fulfillment costs.
“We spent a lot of money on signing contracts and rewards. Although our staffing level is very good, it is not without cost,” he said.
“This is a very competitive labor market,” he added. “Wage pressure” is definitely the “biggest source of inflationary pressure” for the entire Amazon business.
According to Amazon’s earnings report on Thursday afternoon, Amazon added 64,000 employees in the June quarter, setting a record of 1.335 million full-time and part-time employees worldwide.
Olsavsky said the company offers a minimum wage of $15 an hour nationwide and has rapidly expanded its fulfillment and delivery network, doubling its size in the past 18 months.
He said that the highly competitive labor market is one of the reasons Amazon has advanced its annual wage growth schedule to May instead of waiting until October.
A sort of New York Times Investigation The report released in June described the problems of Amazon’s human resources system in keeping up with the company’s development, as well as the company’s leaders’ strategy to encourage employee turnover and limit the upward mobility of hourly warehouse workers.