Amazon Growth Spurt to Create 100K New Jobs

Amazon on Thursday announced it will create more than 100,000 new jobs across the United States over the next 18 months, ranging from entry-level opportunities to positions for engineers and software developers. All will be full-time jobs with full benefits.

Many of the jobs will be in new fulfillment centers currently under construction in Texas, California, Florida, New Jersey and other states.

The company increased investments in its fulfillment centers and in video content in 2016, Chief Financial Officer Brian Olsavsky said in a conference call following its third-quarter earnings report last fall.

The announcement “shows Amazon’s bullish on the U.S. economy,” said Andreas Scherer, managing partner at Salto Partners.

Although most of the new jobs will be in Amazon’s growing number of fulfillment centers, the company’s aggressive expansion of its cloud business also “means more jobs for engineers and software developers to run its massive IT infrastructure,” he told the E-Commerce Times.

Further, Amazon is seeking new ways to handle its own package delivery, which “means significant job opportunities to support the logistics value chain,” Scherer said.

What About the Robots?

Amazon’s fulfillment centers are highly automated. The company has deployed at least 45,000 robots in them so far, and plans to continue automating processes. That raises the question of whether the fulfillment center new hires might be replaced by robots.

“The short answer: not any time soon,” said Seth Lippincott, a senior research analyst at Nucleus Research.

Amazon “will need to hire a lot of very smart people to successfully implement the automation projects it has planned,” he told the E-Commerce Times. “Those high-skill, technical jobs aren’t going to be replaced by automation.”

Further, Amazon is taking on Walmart, which “did over (US)$70 billion in U.S. net sales,” Lippincott noted, and “the turf grab seems to make more sense in the near term than trying to squeeze out efficiencies.”

Making America Great Again

Amazon is “summarizing the jobs program in advance of the inauguration,” observed Ray Wang, CEO of Constellation Research.

Its announcement shows that it is “aligning with the overall ‘Make America Great Again’ message on job creation,” he told the E-Commerce Times.

CEO Jeff Bezos is offering an olive branch to President-elect Donald Trump by getting behind his job creation agenda, Scherer suggested.

The two had “butted heads over the role of The Washington Post during the election,” he noted. Bezos owns the Post.

Incoming president Donald Trump “is now a gift to Amazon,” suggested Trip Chowdhry, managing director of equity research at Global Equities Research.

Amazon’s announcement, Tesla’s pledge to build its gigafactories in the U.S., and Alibaba Group’s promise to bring a million jobs to the U.S. “are very good signals that companies expanding and investing in their footprint will do well,” he told the E-Commerce Times.

Amazon’s Future Path

Amazon’s moves “suggest it believes the American consumer market is still strong and will continue to be so,” said Nucleus Research’s Lippincott.

Amazon’s North America sales in Q3 totaled $18.87 billion, which was below the $19.09 billion analysts had expected, he noted, but it “might be going through some growing pains, where sales figures lag to catch up with the investments it has made. I don’t think it is under threat in the e-commerce department.”

Amazon Web Services brought in revenues of $3.23 billion in Q3, beating Wall Street projections of $3.17 billion, and analysts expect AWS to account for a growing proportion of the company’s earnings.

AWS could deliver 43-50 percent revenue growth for the next three to five years, Global Equities Research projected last month.

There are “a lot of potential areas where [Amazon] can expand,” Lippincott suggested. “Its technology plays are some of the fastest-growing parts of the business.”

Jobs growth lies in the tech sector, Constellation Research’s Wang pointed out, and with Amazon’s investments in technology, it is “gaining on its rivals, which gives it a competitive advantage.”