Inside Amazon's strategy of envisioning the future and working backwards
For years, Jeff Bezos has made a religion of putting the customer first at Amazon.com Inc. Now, with a contentious union vote behind him and the end of his reign as chief executive officer nearing, the world’s wealthiest person says it’s time to focus more on the welfare of the company’s workers as well.
“I think we need to do a better job for employees,” he said in a letter to shareholders. “While the voting results were lopsided and our direct relationship with employees is strong, it’s clear to me that we need a better vision for how we create value for employees – a vision for their success.”
Bezos is stepping down as CEO later this year to become executive chairman, and it was clear that legacy was on his mind in the final missive to investors in his current role.
The company he founded is the world’s largest online retailer and cloud-computing company and ranks highly in polls of popular brands and trusted institutions. But Amazon has found itself challenged by regulators, labor unions and activists around the world in the last year, some of whom make the case that the company reached its perch through aggressive business tactics that left a trail of vanquished competitors, shortchanged partners and burnt out workers.
In the letter, released Thursday, Bezos argues that Amazon’s success emanates from its track record of invention and adding value to society. “Any business that doesn’t create value for those it touches, even if it appears successful on the surface, isn’t long for this world,” he said. In an extremely back-of-the-envelope tally for 2020, he added up the company’s returns to shareholders, employee pay, profits of the small sellers on Amazon and saved time and money from shoppers and cloud-computing customers. The sum: US$301 billion.
Bezos also said the company had 200 million Prime subscribers, up from 150 million at the beginning of 2020.
Referring to employees, Bezos says he wants to add two elements to Amazon’s customer-centric credo. “We are going to be Earth’s Best Employer and Earth’s Safest Place to Work,” he said.
Workers at a warehouse in Bessemer, Alabama, overwhelmingly rejected a proposal to join the Retail, Wholesale and Department Store Union. Of the more than 3,000 ballots cast, Amazon garnered 1,798 nos and the union just 738 yeses. The RWDSU has vowed to contest the results, which were announced last week.
The outcome followed a hard-fought election that lasted seven weeks and attracted national attention from longtime critics of Amazon’s labor policies, including Vermont Senator Bernie Sanders. Much of that criticism focused on the long hours and working conditions at the company’s fulfillment centers. Amazon argues that it has hired hundreds of thousands of people and pays them more than twice the federal minimum wage and provides health benefits.
In the letter, Bezos rejected portrayals of his company as a sometimes brutal workplace for hourly employees. “If you read some of the news reports, you might think we have no care for employees,” he said. “In those reports, our employees are sometimes accused of being desperate souls and treated as robots. That’s not accurate.”
Bezos said Amazon doesn’t set unreasonable performance goals and that 94 per cent of the Amazon’s employees already say they would recommend working there to a friend.
The union quickly responded to the letter.
“The impact on Amazon’s reputation by this campaign has been devastating, regardless of the vote result,” RWDSU President Stuart Appelbaum said in a statement. “We have initiated a global debate about the way Amazon treats its employees. Bezos’s admission today demonstrates that what we have been saying about workplace conditions is correct. But his admission won’t change anything, workers need a union -- not just another Amazon public-relations effort in damage control.”
After he steps down from day-to-day management of the company, Bezos has said he hopes to focus on invention and new initiatives, including work with Amazon’s logistics teams on new programs for workers. He highlighted a few programs already underway, including efforts to prevent repetitive-stress injuries through ergonomic coaching and by adjusting the company’s scheduling software to rotate employees through tasks that use different muscle groups.