Amazon is sounding the alarm over an internal memo that estimates the retail giant may run out of people to rent and run its US-based warehouses within the next 18 months, according to a report.
An internal research paper that was seen by executives from the Seattle-based company warned that a failure to replenish the warehouse-based workforce could frustrate growth plans, along with an overall decline in service quality, according to Recode. according.
According to the memo, Amazon could mitigate the impending disaster by raising wages or accelerating plans to promote warehouse automation.
But that would only delay the crisis by a few years. Instead, it recommends changes in the way management interacts with employees, as well as in the way business is conducted.
“If we continue with business as usual, Amazon will exhaust the labor supply available in the US network by 2024,” according to the memo cited by Recode.
The paper, which was written last year, indicates specific geographic areas where labor shortages are expected to become more acute over time.
As of late 2021, Amazon was having difficulty hiring workers in the Phoenix, Ariz., metropolitan area.
By the end of this year, the company will likely face the prospect of a smaller labor pool in California’s inland Empire region, just 60 miles east of Los Angeles, according to Recode.
An Amazon spokesperson told The Post on Friday, “The company has a number of draft documents written on a range of topics that are used to test assumptions and look at different possible scenarios, but are not then pursued or decided.” Not used to taking.”
“This was one of them. It does not represent the real situation, and we are continuing to do well in Phoenix, the Inland Empire, and across the country.”
Amazon’s warehouse workforce of more than one million people is critical to maintaining its system of online retail and delivery for customers using the popular Prime service.
Last year, the New York Times reported that Amazon was prepared to endure high turnover at its facilities because former CEO Jeff Bezos feared that employees who had been at the company for too long would become satisfied on the job.
But that strategy may become obsolete, especially when a record number of Americans have left their jobs. The Amazon is also facing a tidal wave of unionization efforts, including a successful campaign by organized labor to unionize workers at the Staten Island facility.
Amazon shares were up 1.5 per cent on Friday.