Amazon’s Staggering HR Failures

Amazon’s Staggering HR Failures

Welcome back to Amazon Chronicles, my newsletter about Amazon and the industries in its shadow. As always, the main newsletters themselves are free for everybody; paid supporters usually pledge $5 a month or $50 a year for access to comment threads, some behind-the-scenes community posts, but mostly just to help keep the lights on for everyone else.

You’ll notice that the newsletter has a new design this week! This is something we’ve been working on for a while; the actual work was done by Tara Slade, who somehow incorporated my crude, Pixelmator-made designs into something new and professional. Thanks Tara!

I’ve been writing and reporting about Amazon’s labor issues, from warehouse workers and delivery drivers to content moderators and cloud programmers. It’s my belief that as much as Amazon is a harbinger of change in how we shop and consume media and other goods using the internet as a go-between, it’s equally significant for showing how work is changing in the 21st century.

Above: Amazon employees Traci Washalla and Derek Palmer. Any time the paper of record has photos of your employees animated with fancy spinning graphics, you’re in for a bad time. (Photo by The New York Times)

Of course, this week, two big stories hit about Amazon. The first is a well-promoted, well-reported, triple-bylined (Jodi Kantor, Karen Weise, Grace Ashford), interactive, multimedia, push-to-mobile showpiece festival from The New York Times titled “Inside Amazon’s Employment Machine” (another title used is “The Amazon That Customers Don’t See”). The focus is on a single distribution center in Staten Island, called JFK8 for its proximity to New York City’s JFK Airport, over the year-plus since the onset of the pandemic.

The stories it tells (of Amazon and its employees struggling to regain footing during the pandemic, of systems that treat workers callously by reducing them to their expected optimal output, and mid-level executives who feel conflicted about the systems they’ve helped create) are not unexpected if you know this genre well at all. What’s unusual is the level of detail, the access to documents, the number of current and former Amazon employees who were willing to speak on the record, and how it ties personal anecdotes to company (and increasingly industry) policy.

Here’s a revealing observation (forgive the long quote; the emphasis in bold is mine):

When [Derrick] Palmer last sought a promotion, in early 2020, he was among 382 people who applied for the position. Though he didn’t know it, the odds were steep by design, an outgrowth of Mr. Bezos’ management philosophies. Amazon intentionally limited upward mobility for hourly workers, said Mr. Niekerk, the former H.R. vice president who retired in 2016 after nearly 17 years at the company. Dave Clark, then head of operations, had shot down his proposal around 2014 to create more leadership roles for hourly employees, similar to noncommissioned officers in the military, he recalled. Instead, Mr. Clark, who is now chief executive of Amazon’s consumer business, wanted to double down on hiring “wicked smart” frontline managers straight out of college, Mr. Niekerk said. By contrast, more than 75 percent of managers in Walmart’s U.S. stores started as hourly employees. Following a pattern across Amazon, JFK8 promoted 220 people last year among its more than 5,000 employees, a rate that is less than half of Walmart’s. Amazon’s founder didn’t want hourly workers to stick around for long, viewing “a large, disgruntled” work force as a threat, Mr. Niekerk recalled. Company data showed that most employees became less eager over time, he said, and Mr. Bezos believed that people were inherently lazy. “What he would say is that our nature as humans is to expend as little energy as possible to get what we want or need.” That conviction was embedded throughout the business, from the ease of instant ordering to the pervasive use of data to get the most out of employees. So guaranteed wage increases stopped after three years, and Amazon provided incentives for low-skilled employees to leave. Every year, Mr. Palmer saw signs go up offering associates thousands of dollars to resign, and as he entered JFK8 each morning, he passed a classroom for free courses to train them in other fields. Mr. Agboka, the H.R. leader, said while the company offered training and careers at Amazon to those interested, it was proud to also provide people short-term employment for the “seasons and periods of time” they need.

And later:

[David] Niekerk said Mr. Bezos drove the push to remove humans from the hiring process, saying Amazon’s need for workers would be so great, the applications had to be “a check-the-box screen.” Mr. Bezos also saw automated assessments as a consistent, unbiased way to find motivated workers, Mr. Niekerk said. Amazon boasted about the jobs it created, calling itself a force for growth and sustenance. What the numbers masked was that many workers cycled out of Amazon within months or even days.

That’s the system that’s being created in industrial (and not just industrial) labor today: not careers but gigs, with better pay and benefits than the worst jobs, but also even less room for advancement or scrutiny on how and where you’re hired. The assumption is that low-level employees will cycle out, even if serious injuries, chronic humiliations, or (unlikely, but) a global pandemic forces you out of the workforce sooner than expected.

This high rate of churn is somewhat paradoxically considered, from a top executive’s perspective, a good thing: the lost costs paid for worker acquisition and training are more than made up for by making it difficult for long-term workers to socialize, build up relationships with each other, and organize (formally or informally) to transform the job.

Or, as Vox’s Jason Del Rey writes in another story this week [see below], “Amazon corporate managers have goals for “unregretted attrition” — basically a percentage of their staff that should leave the company each year, either voluntarily or by being forced out.” It’s just like Adam Serwer put it in a different context: the cruelty is the point.

But if you’re an Amazon employee responsible for directly training and managing those workers, or thinking down the road at what might happen when and if you’ve exhausted a small town’s supply of blue-collar workers, you might feel differently.

Let’s suppose you’re charged with hiring Black employees to work at Amazon, up and down the organizational chart. Amazon’s reputation isn’t great for any of its employees at any level, and I think it’s fair to say that both Big Tech and Big Blue Collar jobs, like most professions, have done better by white men than they have anyone else. Again, here too, Amazon is pushing uphill, but Del Rey does an excellent job getting sources on the record to show that here, too, Amazon’s corporate policies and HR culture actually help keep the company from doing right by its employees.

The story here synthesizes complaints from five different lawsuits brought by women of color against Amazon for racial discrimination in recent months, but it goes further:

Over the past few months, Recode has interviewed more than 30 current and former Amazon employees who detailed allegations of racial bias and discrimination on the job — and many of them said the company’s HR department was part of the problem. More than a dozen of those sources, all of whom have worked in diversity, equity, and inclusion roles inside Amazon, told Recode that they believe Amazon’s HR leader, Beth Galetti, who is white, was for years one of the main barriers to Amazon becoming an equitable workplace for employees of all races.

In particular, the Vox story quotes employees in charge of diversity, equity, and inclusion efforts at Amazon who say that the head of HR has made it impossible for them to do their jobs. And one of the five lawsuit plaintiffs, Pearl Thomas, was a business planner for Amazon’s HR department.

Again, this is upsetting but not unheard of. Far, far too many contemporary human resources departments are constructed to protect the company and powerful people within it than they are the employees they are in principle bound to help. But the analysis in this story suggests there is nevertheless a sense that Amazon is ahead of the curve in deliberately creating a workplace development designed to increase churn, prioritize operational success over employee happiness, promotion, or retention, and push people out who might agitate for change.

In DEI jobs, much like on the warehouse floor, Amazon seems to consistently prefer less experience to more. After a renewed focus and some progress made on DEI efforts last year, following George Floyd’s murder in Minneapolis and worldwide protests against racial inequities, Amazon seemed to backslide:

When Amazon’s former head of the global diversity team, Elizabeth Nieto, left the company in early 2021, Galetti replaced her, at least on an interim basis, with a longtime vice president in charge of a large technical team focused on recruiting. But the actual day-to-day management of the diversity team shifted to one of the employment lawyers who had just a few months earlier joined the diversity organization — she had no other prior DEI experience. (Amazon has two structures for diversity work at the company. The majority of diversity employees work within different business divisions like Amazon Web Services or Amazon Studios, while a smaller group of employees work on a central global diversity team under human resources and Galetti that’s intended to work on company-wide initiatives versus division-specific ones.) Sources told Recode that once the employment attorney took over the diversity team, she moved members of its research, analytics, and recruiting units to other divisions of the company. An internal memo announcing the restructuring said the departing employees would still be “closely tied” to the central diversity team, but the shake-up was nonetheless a shock to DEI employees across Amazon. Then, just two days after Recode notified Amazon about the content of this story, the company announced yet another reshuffling: The employment lawyer who had been the day-to-day leader of the diversity team on an interim basis was now moving with her staff off the diversity team. The new employment lawyer is becoming Galetti’s pseudo-chief of staff, according to sources — a role known inside Amazon as a technical adviser or “shadow.” With this change, the group’s actual DEI experts would remain on the diversity team but begin reporting to a new temporary boss until a permanent vice president is hired to head up DEI work across Amazon. Even before this latest overhaul, around two dozen members of Amazon’s central diversity team had either left the team or been pushed out over the past two years, according to sources. Today, the team has fewer than 10 employees, sources say. “You can’t say you’re committed to diversity, equity, and inclusion and then start dismantling the DEI team,” a person who has worked in a diversity role at Amazon told Recode.

There are clear common themes to this range of stories. As Shira Ovide of the NYT wrote for a follow-up newsletter, “Amazon Is Brilliant. Why Not at H.R.?” This is posed as a contradiction, and it probably should be. But I want to unpack it a little bit.

First, it seems clear that at least among some executives and managers at Amazon (including, the reporting suggests, Jeff Bezos and his inner circle), high churn, arbitrary (but almost always numerical) metrics for success, and a grim, possibly cruel assessment of human nature is not some unfortunate accident, but a business strategy. The point is to privilege business operations over everything else. Maybe this approach to employee promotion and retention is too chaotic and self-destructive to survive. Maybe it brings too much unwanted attention from news organizations and politicians. But at least right now, Amazon is doing this on purpose. They’re not just overprivileged screw-ups who don’t get it. They have a plan. (NB: This is probably worse.)

The other thing is that among Amazon’s peers, whether in tech or in logistics or retail, none of this is wild. This is all awfully close to The Way Things Are Done Now. Ask your non-tech, white collar peers, folks who work in media, or at a hospital, or a university, what their experiences have been like dealing with HR, following a workplace injury, or navigating upper management as a Black woman? Now try Wal-Mart, Costco, or FedEx.

Sorry to keep beating this drum, but Amazon might be an egregious abuser, AND might also just be slightly ahead of the curve.

(This is actually way Karen Weise’s response to Shira Ovide in the last newsletter is so interesting: it suggests that other industries might have some ways to mitigate the problems Amazon is facing.)

Are there successful companies that manage hourly workers differently than Amazon?Costco’s chief executive testified to Congress that its hourly workers tend to have long tenures. That’s a source of pride for Costco. Walmart is often criticized for its labor practices and it generally pays less than Amazon, but it says that more than 75 percent of managers at its U.S. stores started as hourly employees. It’s extremely challenging to make that jump at Amazon. Sam’s Club, which is part of Walmart, trains workers to do multiple jobs in a store. That’s partly to keep people feeling fresh in their jobs and learning new skills. Amazon warehouse employees might do the same type of work for 10-hour shifts every day.

I do think, however, that the most likely way Amazon’s labor practices change is through a mix of internal and external pressure: labor organization, news stories, and legislation. If done well, this could have the added benefit of not just changing Amazon, but an entire slew of industries where Amazon is looked to as a leader.