Monday, May 25, 2015

Are Amazon warehouses creating fewer jobs?

Job promises falling as Amazon builds more space

Are Amazon warehouses creating fewer jobs?

The rapid expansion of Amazon.com's U.S. warehouse network has brought eager tax concessions from job-hungry communities that hope to land plenty of fulltime $10-12/hour jobs (and many more in the seasonal Christmas rush) for unskilled and low-skilled workers, replacing entry-level and laboring jobs that used to be available at ailing retail stores and vanished factories.

How many jobs? The trend seems to be fewer, as Amazon builds more:

Up til recently, Amazon routinely advertised 1,000 or more fuilltime jobs at its million-square-foot facilities in Pennsylvania, Indiana and other early-adopter states.

Last fall, Amazon promised 849 fulltime jobs at its million-sq-ft facility in Middletown, Del. 

Amazon is projecting just 750 jobs at its million-sq-ft facility in Robbinsville, NJ, near Trenton.

Why the drop? The company doesn't much talk about its local plans, leaving that up to local officials and outside Amazon-watchers. We do know Amazon has been buying warehouse robot systems and cutting costs by investing in machines, like manufacturers.

Update: "
Ecommerce is labor-intensive – there are many steps in sorting, shelving, picking, packing, shipping," Fiona Dias, chief strategy officer at Amazon rival Kynetic's ShopRunner service in West Conshohocken. 

But even Amazon's Kiva warehouse robots "are very expensive and have limits in their application," she added. Robots work best "picking many identically sized items," as at a factory, "not lots of different size packages" as in a retail fulfillment center.

About this blog

PhillyDeals posts drafts, transcripts and updates of Joseph N. DiStefano's columns and stories about Philly-area business, which he's been writing since 1989.

DiStefano studied economics, history and a little engineering at Penn and taught writing at St. Joseph's. He has written thousands of columns and articles for the Inquirer, Bloomberg and other media, wrote the book Comcasted, and raised six children with his wife, who is a saint.

Reach Joseph N. at JoeD@phillynews.com, distefano251@gmail.com, 215.854.5194 or 302.652.2004.

Reach Joseph N. at JoeD@phillynews.com or 215 854 5194.

Joseph N. DiStefano