Amazon to hire 100,000 workers as e-commerce swells amid the pandemic

(Amazon founder and chief executive Jeff Bezos owns The Washington Post.)

Competition among major online retailers has intensified as many Americans adapt to a prolonged period of working from home, and consumers look to online shopping to replace visits to the store. But in the early months of the pandemic, Amazon was caught flat footed.

As consumers rushed to buy cleaning supplies, home office equipment, and recreational goods, Amazon was rocked by shipping delays and a depleted inventory, forcing users to shop elsewhere. Walmart and Target, with their brick-and-mortar empires, rushed to fill some of that void. Their retail locations served as pick up depots and e-commerce shipping hubs, exploiting the legacy of an established physical presence.

By summer, Amazon’s share of the U.S. online retail market fell from 42.1 percent in January to 38.5 percent in June, according to data from Rakuten Intelligence. Meanwhile, Walmart increased its position from 2.2 percent to 3.5 percent, and Target boosted its share from 3.5 percent to 5.0 percent.

“Despite their profits, I thought the company’s in-stock performance and delivery standards were terrible in many cities, and I didn’t think they were particularly great to their front line workers,” said Paula Rosenblum, an analyst for Retail Systems Research in Miami. She added that the company is bracing for some portion of employees to be out sick from covid-19 and other illnesses, and is preparing for a potential blowout holiday season.

“Let’s see if they can recoup the business they gave away to Walmart, Target and Kroger.”

Sucharita Kodali, a retail analyst at Forrester Research, said Amazon hires 100,000 to 200,000 more workers every holiday season. While it’s unclear how many of the people brought on during the covid crisis will remain permanent employees, she said the latest expansion seems in line with its traditional end-of-year boost.

Amazon’s growth stands in contrast to what is playing out in the larger retail sector, which has seen more than a dozen large retailers file for bankruptcy since the pandemic started six months ago, ushering in a recession and historically high unemployment. Several well-known brands, including Lord & Taylor, Modell’s, Stage Stores and New York & Co., are shuttering all their stores. Those that survive, will be leaner: The Gap announced plans to close 200 locations, while Ascena Retail Group — the parent company of Ann Taylor, Lane Bryant and Justice — is closing nearly 1,600 stores while in bankruptcy. Overall, a record 25,000 stores are expected to disappear this year, according to Coresight Research.

Amazon’s net sales jumped by 40 percent, according to the company’s most recent earnings report, generating $88.9 billion compared to 63.4 billion during the same period last year. The company doubled its profits in the second quarter, leaping from $2.6 billion in 2019 to $5.2 billion during the months of April, May and June, as the coronavirus continued to spread across the country.

Amazon contends that the employees were dismissed for violating internal policies. Earlier this year, hundreds of Amazon employees staged a virtual rally, protesting what they said were unethical working conditions.