Amazon gets the president's attention

The e-commerce giant is hiring thousands more workers to keep up with its growth demands.

By Benzinga Jul 30, 2013 4:50PM
By Jim Probasco (AMZN)’s growth spurt continues, and with it, jobs, jobs, jobs.

According to The Wall Street Journal, the company currently has openings for 5,000 full-time positions at 17 facilities.

In addition, according to USA Today, Amazon plans to add another 2,000 customer service jobs, some of which will be full-time, some part-time and the rest seasonal. The total number of jobs added could go up as Amazon adds more facilities. The company said the fulfillment center jobs would pay 30% more than traditional retail jobs.

In the face of growing sales volume and attempts to add new services such as grocery delivery, Amazon has been building warehouses at a fast clip. In addition, Amazon warehouse space is increasingly taken up with goods sold by third parties and stocked by the company. This requires more warehouse space – and the building and jobs boom continues. logo © Spencer Platt/Getty ImagesThere is a downside to all this warehouse expansion. The Wall Street Journal reported that for Q2 the company posted a $7 million loss. A year earlier, Amazon experienced a 22% jump in revenue to $15.7 billion. Unfortunately, the company spent $15.63 billion to get it.

For a long time, Amazon avoided expanding into some states, due to the fact it might trigger online sales taxes, a competitive advantage over brick-and-mortar stores the company didn’t want to give up. However, as the inevitability of Congressional action allowing states to collect sales tax from online retailers grows, the issue is fast becoming moot.

At any rate, this Amazon "jobs" talk has caught the eyes and ears of the White House.  President Obama visited Amazon’s Chattanooga, Tenn. facility Tuesday as part of a regional series of speeches on -- what else? -- jobs and the economy.

The bulk of Amazon’s new jobs involve picking, packing and shipping merchandise. In addition to higher pay, the company said it would be offering stock grants to many full-time employees.

The company also said it would pay up to 95% of tuition for educational advancement for eligible employees --  even if the training was not relevant to a career at Amazon.

All this expansion coupled with apparent altruism is done with a purpose, according to Bloomberg. It quoted Amazon chief financial officer, Thomas Szkutak, who said on a conference call July 25, "As we get closer and closer to customers with fulfillment, we have seen growth."

Amazon Prime members are driving that growth, Bloomberg said. They pay $79 a year for, among other things, unlimited two-day shipping. In order to provide that service to paying customers who, according to Colin Sebastian, an analyst at Robert Baird & Co., spend three to four times more than non-Prime members, the company has had to place fulfillment centers closer to its customer base.

At the time of this writing, Jim Probasco had no position in Amazon.

More from Benzinga
Jul 30, 2013 8:58PM
I like shopping with Amazon and Costco plus any other business that treats its employees well or at least better than the competitors.
Jul 30, 2013 10:47PM

When jobs were disappearing and U/E climbed....You blamed Obama?

When jobs started climbing and U/E dropped....You don't want to give Obama credit ?


I really don't understand your point....Are you schizophrenic ?

Jul 30, 2013 9:47PM

I've never shopped at Amazon and don't know anything about how its managed, so I won't pass judgement on them per se.  However, what's with all the hating and negative comments?  On the surface, (and even the writer notes 'apparent altruism') its refreshing hearing this after hearing about how Walmart treats their employees so poorly and sticks it to the taxpayer in the form of wages so low that federal assistance is required for its employees.  At least Amazon (claims) that they will pay a 30% premium over other service sector jobs and help pay for educational advancement; hopefully a tool so a worker can move up the socio-economic ladder.  I'm with SCJason in shopping w/ a business that treats its employees well.

Jul 30, 2013 6:58PM
Good for Amazon, but I don't see what Obozo has to do with this?
Jul 30, 2013 8:20PM
The president will want to take credit for this hiring, he'll say his jobs policy is working.  Hahahahahahaha!  We have at least 11% unemployment, and more people on the government payroll than has ever been recorded in our entire United States history.  Thanks Mr. President, nice job!  Next year be sure to steal more money from the rich to support all of these "employed" people.
Jul 30, 2013 8:10PM
Quite sure Obama will try to take credit for the growth of Amazon. And unforturnately there are some Americans who will believe it, and the news media will report it. Duh?
Jul 30, 2013 8:14PM
Did the President applaud the creation of more menial labor jobs? The whole idea of warehouses full of crap smacks of changing the "import" problem to an "imported" problem. What's the difference if it still doesn't actually do anything good for the economy? Amazon-- you are willing to lose $7 million but you want to pay college tuition? How about you teach your zombie labor staff about free enterprise and cut them lose after 4-5 years of grunt work. This smells like psychopathy and as for the President, we are looking for leadership... the kind that gets ticked off at McConnell's 450th filibuster and beats the crap out of the buffoon or squirts some dish soap in Boehner's 12th scotch and water of the day so he gets the shitts for a week and can't wisecrack every little attempt of forward motion. We need progress, not crap from a nation-killer like Amazon.
Jul 30, 2013 5:30PM
Once taxes are equal across the board, then the real fun starts for the Stock which is Amazon. The problem with Jobs like those at Amazon is that they over time, have an severe effect on the body. If folks work there too long, their bodies will literally Break Down. Folks are on one hand telling folks that little to if any Jobs are being Created then they say go out and work two JOBS. They want to have it both ways and they can't. But oh how they try.
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