How many people does it take to keep growing Amazon while making one-day Prime shipping a reality? At least 750,000. That's Amazon's current head count, after a hiring spree that added 96,700 new employees in only three months. Just over half the company's employees, about 400,000 are in the U.S. And Amazon isn't done yet: It's planning to hire tens of thousands more.
According to GeekWire, it's only the second time Amazon has added this many new employees in such a short period, the last time being the third quarter of 2017, when it added 159,500 employees. But more than half of these new hires--87,000 of them--were Whole Foods employees who became Amazon employees when the ecommerce giant acquired the grocery chain. (Disclosure: I'm also a GeekWire contributor.)
The current hiring binge has nothing to do with an acquisition, and quite a lot to do with Amazon's new policy of providing one-day free shipping on Prime orders. The new delivery offering, which began rolling out in June, drove up Amazon's shipping expenses in the third quarter of 2019 by even more than the $800 million the company anticipated. The higher expenses cut into profits, which were 28 percent lower than for the same quarter in 2018. Those lower profits drove Amazon's stock price down by 10 percent in one day, although the next day it bounced back almost to where it began. After all, Jeff Bezos has a long history of sacrificing short-term profits in favor of long-term market gains, and investors know that he usually wins these bets.
The company has already warned investors that it will have much, much higher shipping costs in the fourth quarter of 2019--about $1.5 billion more than in the same quarter of last year. That's because it expects many millions of Prime members to take advantage of free one-day shipping when they do their holiday shopping. And, of course, the company now has nearly 100,000 new employees to pay.
More Amazon hires coming.
The headcount expansion isn't over yet. GeekWire reports that Amazon's jobs page still has more than 30,000 open listings, about a third of them in Seattle where it is headquartered and already employs more than 50,000 people. The next biggest crop of openings is in Bengaluru, India, where the company hopes to hire hundreds of software developers and designers. It also has more than 100 job openings each in Chicago and Portland, Oregon, where it has expanded its real estate footprint, suggesting more hiring is on the way.
And what of Arlington County, Virginia and the independent city of Alexandria, Virginia which together are home of the much ballyhooed second Amazon headquarters or HQ2? Amazon has promised to bring 25,000 jobs to the area, and Arlington and the Commonwealth of Virginia have promised $573 million in return--if and when those jobs are created and tax revenues rise. For the moment, Amazon has 354 open jobs there, which doesn't sound like much compared to a promise of 25,000. But that big expansion is for sometime in the future. For this year, Amazon says it will only add 400 jobs in that region.