Amazon Adding 75,000 Jobs to Meet Demand; New Grocery Customers on Invitation Plan
Amazon upped the ante on the amount it expects to spend on increased worker wages during the “unprecedented” COVID-19 pandemic. The company raised the figure from $350 million it announced in March (see 2003160051) to more than $500 million, it said Monday.
Sign up for a free preview to unlock the rest of this article
Export Compliance Daily combines U.S. export control news, foreign border import regulation and policy developments into a single daily information service that reliably informs its trade professional readers about important current issues affecting their operations.
After filling 100,000 positions created in March to handle spiking demand during the coronavirus outbreak, Amazon is creating 75,000 more jobs to handle even more demand “during this unprecedented time,” said Vice President-Grocery Stephenie Landry.
Amazon put its food delivery services on an invitation-only basis for new customers, Landry blogged Sunday. The company is “temporarily asking new Amazon Fresh and Whole Foods Market delivery and pickup customers to sign up for an invitation to use online grocery delivery and pickup,” said the executive. As capacity grows, it “will invite new customers to shop every week.”
The parent company closed some Whole Foods Market locations to focus solely on fulfilling online grocery orders during the COVID-19 pandemic, Landry said. Amazon stretched grocery pickup service from 80 stores to more than 150 in the past few weeks and will expand to more in coming weeks, she said.
New York Whole Foods customers received an email Monday saying, “Your local store is temporarily closed.” Our email referenced a location in midtown Manhattan that we have never shopped. Our local Union Square store is still operating, along with two other Manhattan stores. The closing Bryant Park location, which will shut to shoppers Wednesday, will focus on grocery deliveries to Prime customers “and help us fulfill more orders.” it said.
Amazon has been a leading beneficiary of sheltering-in-place orders, as online grocery shopping skyrocketed from consumers shopping from home. But the surge in demand for essential household items disrupted operations for the company, which has had to add staff and lengthen deliveries to meet the surge in orders. The stock closed 6.2% higher Monday at $2,168.87.
Landry said the company increased order capacity by more than 60% due to COVID-19. It still expects customers to be challenged to find available delivery windows due to restricted capacity resulting from social distancing and higher customer demand. The company will launch a new feature “in coming weeks” that will allow customers to secure a time to shop, Landry said. Grocery delivery customers will get a virtual “place in line”; they will shop on a “first come, first served basis” while Amazon continues to add capacity “as swiftly as possible.”
The focus on essentials has taken a toll on other categories, Cowen analyst John Blackledge wrote investors Monday, referencing an “extended Prime Day/Black Friday type of situation” for Amazon in March, based on an “enormous increase in demand” from homebound shoppers. “Given that AMZN did not have an opportunity to prepare for the surge, a lot of inventory has been depleted and verticals such as fitness are completely sold out,” he said. Blackledge referenced a Cowen consultant who said shoppers “can't find a dumbbell or kettle bell on Amazon" due to the shift to essential goods fulfillment. Amazon is likely to capture new market share “as formerly hesitant AMZN shoppers are drawn to the ecosystem,” said the analyst.
Amazon’s traditional sellers are experiencing "massive issues": Even verticals that are flourishing are having trouble getting back on Amazon, said Blackledge. The analyst noted Amazon's March 17 announcement that it will focus on essential items, “basically halting purchase orders of non-essential goods” to inbound Amazon fulfillment facilities.
That's due to change this week, an Amazon spokesperson emailed following an article that appeared in The Wall Street Journal. "We appreciate our selling partners’ patience as we prioritize products for customers and adhere to extensive health and safety measures in our fulfillment centers to protect our employees," she said. This week, Amazon "will allow more products into our fulfillment centers."
The spokesperson didn't say how products would be prioritized, saying they will be limited by quantity "to enable us to continue prioritizing products and protecting employees, while also ensuring most selling partners can ship goods into our facilities." More details are due to be released during the week.