By Laura Stevens
Amazon.com Inc. on Thursday said it plans to create more than
100,000 full-time jobs in the U.S. within the next 18 months,
leveraging plans already in the works in part to patch up its
contentious relationship with President-elect Donald Trump.
The additional jobs would swell Amazon's U.S. workforce to
280,000, compared with 30,000 in 2011. However, the online retail
giant's rapid growth has kneecapped traditional retailers including
Macy's Inc. and Wal-Mart Stores Inc., which have been cutting jobs
by the thousands.
Amazon said many of the new positions will be at
already-announced warehouses under construction in Texas,
California, Florida and New Jersey. Others will be in areas such as
cloud technology, machine learning and advanced logistics -- some
of which eliminate jobs, experts say.
"Innovation is one of our guiding principles at Amazon, and it's
created hundreds of thousands of American jobs," said Amazon Chief
Executive Jeff Bezos.
A spokesman for Mr. Trump seemed to credit the president-elect
with Amazon's hiring bump because he had urged the tech industry to
keep jobs and production inside the U.S., at a meeting with heads
of tech companies last month. "The President-elect was pleased to
have played a role in that decision by Amazon," the spokesman
said.
Amazon's announcement highlights a new reality for companies as
Mr. Trump prepares to take office: His public praising or shaming
of corporations for their business decisions is pressuring them to
stay in his good graces and to adjust their public-relations
strategies.
During the presidential campaign, Mr. Trump made job creation a
central message and blasted companies, including technology giants,
for purportedly sending jobs overseas. Since his election,
companies across a range of industries have scurried to announce
plans to retain or add U.S. jobs.
Some, such as Carrier Corp. and Ford Motor Co., reversed
existing initiatives to shift manufacturing abroad. Others
trumpeted efforts that had been under way before November. In
December, SoftBank Group Corp. Chief Executive Masayoshi Son met
with Mr. Trump to say he would invest $50 billion in the U.S. and
create 50,000 jobs -- money that would come from a fund he
announced in October.
A few companies have held firm in the face of Mr. Trump's
scolding, such as General Motors Co., which plans to import some
cars from Mexico to sell in the U.S.
Jack Ma, chief executive of Alibaba Group Holding Ltd., a
Chinese competitor to Amazon, met with Mr. Trump on Monday and made
a bold, if vague, promise to create new U.S. jobs by encouraging
American sellers to sell to Chinese consumers.
In an echo of Mr. Ma's proposal, Amazon said additional jobs
could be created indirectly for small sellers who offer their goods
on Amazon's marketplace.
Rosy talk about jobs from companies doesn't mean they are truly
shifting when or whether they bring on new workers, said Peter
Cappelli, a management professor at the University of
Pennsylvania's Wharton School.
"What [companies] are going to do first is spin," he said. That
approach is "just a whole lot easier to do than to actually change
your real numbers," he added.
Companies are hedging against Mr. Trump's threats to punish
businesses that move American jobs elsewhere, Prof. Cappelli said,
and corporate leaders are concerned about potential policy
changes.
During the presidential campaign, Mr. Trump's relationship with
the tech industry was strained. Tech leaders overwhelmingly
supported Hillary Clinton, and Mr. Trump lambasted companies
including Apple Inc. and International Business Machines Corp.
The acrimony between Mr. Trump and Mr. Bezos was particularly
charged. Mr. Trump accused Amazon's CEO of buying the Washington
Post to influence politics. "If I become president, oh do they have
problems," Mr. Trump said. He called Amazon a "no profit company"
in a tweet in December 2015. (Amazon had a profit of $482 million
in the last quarter of 2015.)
That same month, Mr. Bezos, who also runs closely held
rocket-making company Blue Origin LLC, said he would reserve a seat
on one of his rockets for Mr. Trump. "#sendDonaldtospace," a
message from Mr. Bezos' Twitter account read. Weeks before the
election, Mr. Bezos said that the candidate's behavior "erodes
democracy around the edges."
Amazon's share price was one of the hardest hit among tech firms
in the days after Mr. Trump's election, tumbling 9% to as low as
about $719 before recovering.
Analysts were skeptical that Amazon's announcement Thursday
reflected an acceleration of its hiring plans. "There may be some
'political capital' involved with the timing and details," said
Colin Sebastian. an analyst at Robert W. Baird & Co. He said he
expects Amazon's international and domestic employment both to
increase.
Amazon's biggest source of jobs is its warehouses, which process
and ship orders. Amazon opened about two dozen new warehouses in
the third quarter of 2016, prompting costs to soar in part due to
those investments, the company said. That brought its total number
of warehouses globally to about 150.
Before the announcement Thursday, Amazon had been planning to
open some 16 new fulfillment centers over the next few months,
which would have created more than 15,000 jobs, according to data
from supply-chain consultancy MWPVL International Inc. Marc
Wulfraat, president of MWPVL, estimates another 20 warehouses could
be announced this year, employing anywhere from approximately 300
to 6,000 people each.
To reach the 100,000 mark, Amazon is likely to convert some
part-time jobs to full-time, Mr. Wulfraat said. There are also
seasonal workers to pick from: Amazon said it hired 120,000 holiday
workers in the U.S. in 2016, and thousands of them will stay on as
the company continues to expand. "If you look at the growth curve,
I think it's going to continue to be as strong as last year," Mr.
Wulfraat added.
The rapid growth of Amazon and e-commerce in general has cost
traditional retailers thousands of brick-and-mortar jobs. Wal-Mart
plans to cut nearly 1,000 corporate positions before the end of
January, according to a person familiar with the situation, after
cutting about 7,000 back office store jobs last year. Last week,
Macy's said it would slash more than 10,000 jobs and close dozens
of stores.
Oliver Chen, a Cowen & Co. analyst, said online retail
growth rates have been running as high as 25%, while in-store foot
traffic can run down 6% or more. "The organizations are having to
respond to the way in which consumers are changing their shopping
habits," he said. "The penetration rate online is continuing to
grow, and that means less need for physical stores."
Mr. Trump and Silicon Valley executives struck a conciliatory
tone in part just by showing up at their meeting last month. During
the 90-minute summit, Mr. Trump told the 13 executives, including
Mr. Bezos, that he would work with them to foster innovation and to
support fair-trade deals. The group also discussed job
creation.
Mr. Bezos said in a statement at the time that Mr. Trump's
promised focus on innovation "would create a huge number of jobs
across the whole country, in all sectors, not just tech --
agriculture, infrastructure, manufacturing -- everywhere."
--Rachel Feintzeig, Sarah Nassauer and Peter Nicholas
contributed to this article.
Write to Laura Stevens at laura.stevens@wsj.com
(END) Dow Jones Newswires
January 12, 2017 17:03 ET (22:03 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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