Measured by jobs, Amazon.com is one of the bright spots in the long, slow hiring recovery from the 2008 recession: The online retail giant employs 110,000 -- more than Chrysler or DuPont -- many of them low-wage warehouse workers at 96 Amazon "fullfillment centers" in places like the Lehigh Valley, central Pa. and northern Delaware. Hiring has continued, with 500 fulltimers added at Middletown, Del., for a total of 2,000, plus hundreds more in Christmas season, reports the Wilmington News-Journal here.
But Amazon boss Jeff Bezos' comment in his recent annual meeting that the company plans to deploy 10,000 robots by the end of this year -- up from 1,382 at just three of its warehouses as of mid-2013 -- will replace enough workers to save up to $900 million a year, estimates analyst Shawn Milne, in a report to clients of Janney Caplital Markets today. That will enable Amazon to lay off, or not hire, 25,000 workers at $14 an hour, plus healthcare and other benefit.
Milne traces Amazon's reliance on robots to its 2010 $500 million+ purchase of Quidsi/Diapers.com, the automated retailer set up by Bucknell University graduate Mark Lore. Quidsi used robots from Massachusetts-based Kiva Systems Inc., which Amazon bought in 2012 for $775 million.