Amazon.com Inc. announced a pay increase for hourly workers in the United States that it says will take average starting wage for most front-line employees in warehousing and transportation to more than $19 an hour.
The company’s minimum level of $15 an hour for all hourly workers in the U.S. remains unchanged. For jobs in Amazon’s customer fulfillment and transportation groups, the starting pay will increase to $16 an hour, a spokesperson said in an email.
The Seattle-based company said the raise represents additional spending of almost $1 billion over the next year. Amazon is the second-largest private employer in the U.S., behind Walmart Inc., and Amazon employed more than 1.1 million people in the U.S. at the end of 2021. The company’s total workforce was more than 1.5 million as of June 30, 2022. Most of those employees are hourly workers who pack and ship items, or work in retail stores like Whole Foods Market and Amazon Fresh.
The company also is expanding access to a program that lets employees get paid more frequently than once or twice a month, according to a statement.
Amazon faces employee activism and union drives at some of its facilities, including at an Albany, New York-area warehouse where a vote is scheduled for next month. The company is challenging an election last April. In the election, more than 8,000 workers at a Staten Island, New York, warehouse won the right to union representation.
Amazon is No. 1 in the Top 1000, Digital Commerce 360’s database of the largest North American e-retailers by web sales. It is also No. 3 in the 2022 Digital Commerce 360 Global Online Marketplaces Report.
Amazon to close all US customer call centers but one
Amazon will close all but one of its U.S. call centers and shift hundreds of office employees to remote work in an effort to save on real estate, according to people familiar with the matter.
The call centers currently planned for shuttering are in Kennewick, Washington; Lexington, Kentucky; and Phoenix, said one of the people. The person asked not to be named because they weren’t authorized to speak about the plans. The call center that remains open will most likely be in Huntington, West Virginia, or Houston, the person said, adding that the plans still could change.
The ecommerce giant has been seeking to reduce expenses as revenue sales growth slows amid rising inflation and economic uncertainty. This year, U.S. online sales will increase just 9.4% to $1 trillion. That’s the first time growth has slipped into the single digits, according to Insider Intelligence. The cost-cutting comes after Amazon quickly expanded its warehouses and logistics operations when consumer demand jumped during the early stages of the pandemic.
The pandemic also forced companies to embrace remote work for customer service roles and many employees are resisting efforts to return to offices. Offering work-from-home will help Amazon recruit employees in an industry with high turnover. Its cloud computing division sells Amazon Connect software that helps companies create remote customer service networks.
Customer support employees make up a small fraction of the company’s more than 1.5 million workers.
An Amazon spokesman declined to comment about any planned office closings but confirmed the shift to remote work.
Amazon urges call center employees to work from home
The shift is part of a plan to close multiple call centers around the country. That includes one that opened in 2005 in Kennewick, Washington, said a person familiar with the matter. The person asked not to be named because they weren’t authorized to speak about the plans.
“We’re offering additional members of our customer service team the increased flexibility that comes with working virtually,” Amazon spokesman Brad Glasser said in an email. “We’re working with employees to make sure their transition is seamless while continuing to prioritize best-in-class support for customers.”
The pandemic forced companies to embrace remote work for customer service roles. Many employees are resisting efforts to return to offices. Before the pandemic, as many as 90% of some 3 million U.S. customer service representatives commuted to call centers. Post-pandemic, about half of them are expected to work from home and half commute to offices, according to Jeff Christofis, who oversees staffing giant Kelly Services’ contact center unit.
Offering remote work will help Amazon recruit employees in an industry with high turnover. In addition to providing workers flexibility, Amazon won’t limit to specific cities from which to fill positions. It can also save on real estate if it shifts enough staffers to work-from-home and closes existing facilities.
Amazon started letting customer service representatives work from home before the pandemic. Its cloud computing division sells Amazon Connect software that helps companies create remote customer service networks.
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