Reports indicate that Amazon.com, Inc. (NASDAQ:AMZN) is increasing its workforce by 40% on an annual basis. The online retail giant is also already the US’ eighth-biggest private employer and is expected to climb the ranks fast.
According to an analysis conducted by Quartz, retail jobs in the United States are expected to decline by about 1%. In absolute terms this is about 170,000 jobs. One of the factors that are to blame for the loss of these jobs is the use of robots especially in the warehouses owned by online retailers.
Loss of jobs
This year alone Amazon added 55,000 robots and the rate of increase is expected to increase as the online retail giant expands. About 35,000 robots were in the first two quarters of this year while an additional 20,000 robots were added in Q3. With an increase in the number of robots, there was also a loss of 24,000 jobs.
The robots however led to a huge improvement in efficiency. While it takes a human employee 90 minutes to locate a product and then package it for delivery, a robot can perform the same task within 13 minutes.
The increasing rate of automation at Amazon coincides with the Australian launch of the online retailer. Following a period of speculation, Amazon finally started taking orders in the 12th largest economy in the world. For its Australian customers free shipping will be offered across the country for orders whose value exceeds $37.26.
Due to what some analysts claimed were uncompetitive prices and limited product range which led to the conclusion that Amazon would not destroy brick and mortar retailers in Australia in the short term, shares of local retailers rallied.
“Amazon’s not materially cheaper on a wide basket of items than the retailers. The retailers are rallying. It’s a realization that Amazon is not going to kill Australian retail, at least not today,” Daniel Mueller, a portfolio manager at Vertium Asset Management, said.
Before the launch, Australia’s Amazon-registered sellers had to send their products offshore since the online retailer lacked a local warehouse. This resulted in longer waiting periods as well as higher shipping charges. Amazon’s Australian warehouse is now located close to the city of Melbourne.
Mid next year Amazon will start offering fast shipping services despite the fact that Australia is one of the most sparsely populated nations in the world. While Australia’s size is close to that of mainland U.S., it has one-thirteenth of the population.
On Monday shares of Amazon fell by 2.44% to close the day at $1,133.95.