Amazon executives believe that the Jeff Bezos-led e-commerce giant is nearing its next major workplace transformation: replacing over half a million jobs with robots, according to a report by the New York Times (NYT).
Since 2018, Amazon’s US workforce has tripled to nearly 1.2 million. However, the company’s automation team expects that it can prevent the need to hire more than 1,60,000 employees in the US by 2027. The report said that the automation could save approximately 30 cents per item that Amazon processes, including picking, packing, and delivery, and up to $12.6 billion in operational costs between 2025 and 2027.
Executives informed Amazon’s board last year that robotic automation could help the company flatten its hiring curve, even as it projects sales to double by 2033. That would mean Amazon wouldn’t need to hire over 6,00,000 additional employees, it added.
Amazon aims to build warehouses that employ few humans at facilities designed for superfast deliveries. The company’s robotics team ultimately plans to automate 75% of its operations, the report said, citing documents.
What did Amazon say?
Amazon issued a statement claiming that the documents seen by the NYT were incomplete and did not depict the company’s full hiring strategy.
Kelly Nantel, an Amazon spokeswoman, explained that the documents represented the perspective of a single group within the company and added that Amazon intends to hire 2,50,000 staff for the upcoming holiday season. However, the company did not specify how many of these positions would be permanent.
The publication also examined internal Amazon documents from the past year. These included working papers illustrating how various parts of the company are managing its ambitious automation initiatives, along with formalised plans for a department of over 3,000 corporate and engineering staff primarily focused on developing the company’s robotic and automation systems.
Udit Madan, who oversees global operations at Amazon, said in an interview that the company has a long-standing tradition of using automation savings to generate new employment opportunities, including a recent effort to establish more delivery depots in rural regions.
“That you have efficiency in one part of the business doesn’t tell the whole story for the total impact it might have,” the report quoted Madan.
Amazon’s push towards robotic facilities
Amazon launched its most advanced warehouse in Shreveport, Louisiana, last year, serving as a model for future robotic fulfilment centres. Once an item is packaged, human interaction is minimal. With a thousand robots in operation, the facility reduced its workforce last year by 25% compared to a non-automated setup, the report said, citing documents.
The report added that as Amazon deploys more robots next year, it anticipates employing roughly half the number of workers it would otherwise need without automation.
“With this major milestone now in sight, we are confident in our ability to flatten Amazon’s hiring curve over the next 10 years,” the report quoted the robotics team’s strategy plan for 2025.
Amazon intends to replicate the Shreveport design across approximately 40 facilities by the end of 2027. This initiative begins with a large warehouse recently opened in Virginia Beach. Additionally, Amazon has started renovating older facilities, such as the one in Stone Mountain near Atlanta.
The facility currently employs about 4,000 workers. After installing robotic systems, it is expected to handle 10% more items but may require up to 1,200 fewer employees, based on an internal analysis cited in the report. However, Amazon said that the staffing number may vary.