Amazon is expected to face a labor shortage for its US warehouses by the year 2024, according to an internal memo that was leaked to Recode. The memo had data from internal research conducted in 2021 that predicted an impending labor crisis for the company.
The report insisted that the company take steps to address the future labor gap like increasing wages to retain its existing workforce and attract more new hires. It also directed the company towards automation in warehouses. “If we continue business as usual, Amazon will deplete the available labor supply in the US network by 2024,” wrote the authors of the report.
In a statement to Engadget, an Amazon spokesperson said that the leaked document isn’t an accurate reflection of its hiring reality. “There are many draft documents written on many subjects across the company that is used to test assumptions and look at different possible scenarios but aren’t then escalated or used to make decisions. This was one of them. It doesn’t represent the actual situation, and we are continuing to hire well in Phoenix, the Inland Empire, and across the country,” wrote Rena Lunak, Amazon’s director of global operations and field communications.
Amazon already has a degree of automation in the form of acquiring Kiva Systems in 2012. However, a Wired investigation from last year revealed that these robots cannot handle advanced fulfillment tasks that can only be performed by a human worker.
Amazon is the second-largest private employer in the US and is the largest private employer in several US states and cities. The company announced plans to hire 125,000 workers last fall, which is almost the same as the population of Savannah, Georgia. But the new hires largely appear to be replacing workers who have been terminated or resigned. Amazon’s turnover rate is roughly 150 percent a year, or twice the amount of the retail and logistics industries at large, a New York Times investigation stated last year.
Amazon also has to compete with big-box stores like Walmart and Target, which are now offering competitive wages to those with warehouse experience. “We are hearing a lot of [Amazon] workers say, ‘I can just go across the street to Target or Walmart,’” Sheheryar Kaoosji, co-executive director of Inland Empire’s Warehouse Worker Resource Center told Recode.