Outsiders see a business success story for the ages. Many insiders see an employment system under strain.
June 15, 2021
An Amazon worker tries to return from a Covid-related leave and is mistakenly fired. A wife panics as disability benefits halt for her gravely ill husband. An employee is fired for having a single underproductive day.
An examination by The New York Times into how the pandemic unfolded inside Amazon’s only fulfillment center in New York City, known as JFK8, found that the crisis exposed the power and peril of Amazon’s employment system. The company famously obsessed with satisfying customers achieved record growth and spectacular profits, but its management of hundreds of thousands of warehouse workers was marked at times by critical mistakes, communication lapses and high turnover.
Here are the takeaways:
1. Amazon has been churning through employees.
Amazon conducted a hiring surge in 2020 that was unparalleled in American corporate history. In just three months, it signed up 350,000 workers — more than the population of St. Louis — offering a wage of at least $15 an hour and good benefits.
But even before the pandemic, previously unreported data shows, Amazon was losing about 3 percent of its hourly associates each week — meaning its turnover was roughly 150 percent a year. At that rate, Amazon had to replace the equivalent of its entire work force roughly every eight months.
Kelly Nantel, an Amazon spokeswoman, responded to questions about the company’s turnover by saying, “Attrition is only one data point, which when used alone lacks important context.”
Inside Amazon’s Seattle headquarters, the turnover has made some executives worry that the company may run out of workers. Paul Stroup, who until recently led human resources teams focused on understanding warehouse workers, felt disappointed that he “didn’t hear long-term thinking” about the company’s quick cycling through workers. He likened it to using fossil fuels despite climate change.
“We keep using them,” he said, “even though we know we’re slowly cooking ourselves.”
2. Buggy and patchwork systems caused some workers to lose their benefits, and even their jobs, in error.
More than 25 current and former Amazon employees who worked on the disability and leave system bemoaned its inadequacy in interviews, calling it a source of frustration and panic. The problems escalated during the early months of the pandemic, when a new case management system designed to address the problems and provide flexibility was still buggy. Workers who had applied for leaves were penalized for missing work, triggering job-abandonment notices and then terminations.
“Please note the following,” Dan Cavagnaro, a JFK8 worker, wrote in a final, unanswered email plea. “I WISH TO REMAIN EMPLOYED WITH AMAZON.”
He was mistakenly fired anyway.
Dangelo Padilla, who worked as an Amazon case manager at a back office in Costa Rica, said he had witnessed numerous people being fired for no reason.
“I saw those situations every day,” he said.
Ms. Nantel, the spokeswoman, said the company had quickly approved personal leaves during the pandemic, hiring 500 people to help process the increased volume, and worked hard to contact employees before they were fired to see if they wanted to keep their jobs.
3. Amazon’s strict monitoring of workers has stoked a culture of fear.
Amazon tracks workers’ every movement inside its warehouses. Employees who work too slowly, or are idle for too long, risk being fired.
Dayana Santos was a top performer when she had one bad day in 2019. Her bus was late, then her department was reassigned, causing her to scour the warehouse for a new workstation. That afternoon, she was stunned to find that she was being fired for having too much “time off task,” or T.O.T.
Very few associates are fired for low productivity or time off task, but employees don’t know that. The goal, JFK8’s internal guidelines state, “is to create an environment not where we are writing everyone up, but that associates know that we are auditing for T.O.T.”
The system was designed to identify impediments a worker may face, but some executives, including the early architect of Amazon’s warehouse human relations, worry that the metrics now cast an outsize shadow on the work force, creating an anxious, negative environment.
After questions about Ms. Santos and T.O.T. from The Times, Amazon announced changes to its policy so that workers would never be fired for one bad day. Ms. Santos and all those like her are now eligible to be rehired. The company said it had been reconsidering the policy for months.
4. There is rising concern over racial inequity.
The retail giant is largely powered by employees of color. According to internal records from 2019, more than 60 percent of associates at JFK8 are Black or Latino.
And Black associates at the warehouse were almost 50 percent more likely to be fired — whether for productivity, misconduct or absenteeism — than their white peers, the records show. (Amazon said it could not confirm the data without knowing more specifics about its source.)
Derrick Palmer, a Black worker at JFK8, began at the company in 2015 as an enthusiast, and he was often a top producer.
But between the constant monitoring, the assumption that many workers are slackers and the lack of advancement opportunity, “a lot of minority workers just felt like we were being used,” Mr. Palmer said. His comments echoed the sentiment of Black workers behind an unsuccessful unionization campaign at an Amazon warehouse in Alabama this year.
This spring, the company introduced a host of diversity plans, including a goal to “retain employees at statistically similar rates across all demographics” — an implicit admission that the numbers had been uneven across races. At JFK8, leaders are holding weekly “talent review” meetings to ensure that Black and Latino workers, among others, are advancing.
5. Many of Amazon’s most contentious policies go back to Jeff Bezos’ original vision.
Some of the practices that most frustrate employees — the short-term-employment model, with little opportunity for advancement, and the use of technology to hire, monitor and manage workers — come from Jeff Bezos, Amazon’s founder and chief executive.
He believed that an entrenched work force created a “march to mediocrity,” said David Niekerk, a former long-serving vice president who built the company’s original human resources operations in the warehouses.
Company data showed that most employees became less eager over time, he said, and Mr. Bezos believed that people were inherently lazy. “What he would say is that our nature as humans is to expend as little energy as possible to get what we want or need,” Mr. Niekerk said. That conviction was embedded throughout the business, from the ease of instant ordering to the pervasive use of data to get the most out of employees.
Mr. Bezos recently made startling concessions about the system he invented. In a letter to shareholders, he said the union effort in Alabama had shown that “we need a better vision for how we create value for employees — a vision for their success” — and vowed to become “Earth’s best employer.”
What is not clear is how or whether he and his successors will reassess the systems that have propelled Amazon’s dominance.
Mr. Cavagnaro, the worker Amazon inadvertently fired, asked: “Are they going to address the issue of an expendable work force? Are there going to be any changes?”