From action in Italy to hiring changes in the U.S. and a new offering aimed at lower-income customers, there’s no shortage of news at Amazon.
Hiring freeze comes as labor estimates miss by 1 million
The Seattle-headquartered e-commerce giant apparently won’t be adding significant numbers to its office headcount anytime, according to a New York Times report.
In an email to recruiters, the company reportedly said it was halting hiring for all global corporate roles, including technology positions, in its Amazon stores business, which covers retail and operations.
Approximately 20,000 openings were posted in that division as of Monday evening.
“Amazon continues to have a significant number of open roles available across the company,” said Brad Glasser, Amazon spokesperson, in a statement emailed to Sourcing Journal. “We have many different businesses at various stages of evolution, and we expect to keep adjusting our hiring strategies in each of these businesses at various junctures.”
The NYT report came the same day the U.S. Bureau of Labor Statistics reported that available job openings nationwide totaled 10.05 million in August, a 10 percent drop from the 11.17 million reported in July and well below FactSet’s 11.1 million estimate.
The profitable Amazon Web Services (AWS) cloud computing division will not be affected by the freeze. Some roles, such as student hiring and field positions, were exempt from the pause, the email reportedly said.
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The email allegedly said recruiters should tell job candidates that Amazon was not in a hiring freeze, though it went on to say all open job requisitions should be closed in the coming days. It also said new openings will be available early next year.
Amazon employed 1.52 million people in the second quarter, almost 100,000 fewer than at the end of March, primarily from hourly workforce reductions.
Candidates with interviews scheduled before Oct. 15 could still receive offers, but they would not start until 2023, the report said. The email recommended that phone calls to screen candidates and other early recruiting activities should be canceled.
Layoffs and hiring slowdowns have hit retailers, logistics players and tech titans alike in recent months amid a murky economic outlook. Nordstrom confirmed plans to lay off 222 workers at its Cedar Rapids, Iowa distribution center in late September, while Walmart made plans to hire just 40,000 workers for the holidays, a 73.3 percent decline from the 150,000 it hired last year. Walmart is one of the many who have laid off employees since the summer, alongside Gap Inc., VF Corp., Bed Bath & Beyond, PVH, Allbirds, Shopify, Stitch Fix, StockX and ThredUp.
Meta, the parent company of Facebook, told employees last week that it was freezing hiring for most positions, as it looked to shrink its workforce. Google had previously implemented a hiring pause in July.
Under the regime of Andy Jassy, Amazon has sought to pull back spending across its warehousing and logistics network as it looks to trim costs and sublease more of its industrial real estate. Recently, the company cut as many as 353 employees that worked in one soon-to-be-shuttered Maryland warehouse.
Amazon incurred net losses in the first half of this year, marking the first time the company reported a quarterly loss since 2015.
In recent years, Amazon hosted an annual “Career Day” in September recruiting for tens of thousands of salaried positions. While the tech titan received more than 1 million job applications last year, it did not host the event last month.
Amazon Access
Amazon wants to make life easier for consumers who are either tightening their spending habits or are currently on government assistance programs. And it is doing so amid an apparent tightening of its own labor budget.
The e-commerce giant has launched Amazon Access, a portal for customers to learn more about alternative payment options including SNAP EBT and Amazon Layaway, as well as Prime Access, Prime’s discounted membership program for qualifying government assistance recipients.
Eligible U.S. customers who sign up for Prime Access get Prime membership benefits and perks for $6.99 a month—more than 50 percent off the cost of a full-priced membership of $14.99 per month.
Prime Access benefits include 20 percent on select everyday essentials, ready-made meals and more at Amazon Fresh stores across the U.S., as well as up to 80 percent savings when paying cash for medication without insurance at over 60,000 pharmacies. Plus, the Amazon Prime Secured Card includes no annual fees, and is built for people who are new to credit, or who would like to rebuild their credit.
The discounted membership first launched in 2017, but was rebranded to Prime Access alongside the hub’s debut to give the program more visibility. Amazon says that last year, program members saved an average of more than $1,600 from shipping savings, coupons and membership discounts alone.
Program membership expanded by more than 300 percent from 2019 to the end of last year, Amazon said. U.S. customers can qualify for membership by uploading a valid proof of ID or government assistance documentation.
“Given the tough economic climate, with many facing rising costs on essential needs, we want our customers to know about all the accessible offerings available on Amazon, no matter their circumstances,” the company said in a blog post. “Amazon launched a grassroots program to listen and learn from customers in communities across the country. In fact, this customer feedback is central to the design of our products and services. We found that many of our customers are looking for ways to save money and time, now more than ever.”
Since launching SNAP online purchasing capabilities in 2020, Amazon has expanded its reach to 99.7 percent of U.S. SNAP households with one or more SNAP online purchasing option. Customers with a valid SNAP EBT card in all states, except Alaska, can use their SNAP funds to order eligible groceries online from Amazon.com, Whole Foods Market and Amazon Fresh with free shipping on eligible Amazon orders.
Amazon Layaway, meanwhile, enables shoppers to pay over time without a credit check, added interest or fees. Customers can pay 20 percent of the total cost of their selected items up front with the option, and lock in the price and pay with four additional payments over eight weeks.
In addition to surfacing information about Amazon’s affordable shopping options, the hub will also display accessibility options. Customers will see an option to change their shopping language, learn about accessibility features and contact accessibility customer support.
Amazon Access also includes information about paying with Amazon Cash, which lets consumers shop on the marketplace without a debit or credit card.
The hub’s debut comes as an uncertain holiday season enters the picture. Recent data from Jungle Scout’s Q3 Consumer Trends Report indicated that 55 percent of respondents have changed their gift-giving and spending plans to deal with inflation. Fifty-four percent said they will spend less per person on gifts, while 47 percent will purchase discounted products.
Amazon also packaged the assets together as prices remain elevated versus last year and consumers keep a keen eye on budgeting. In a monthly survey by Cowen, 77 percent of respondents in August said prices for day-to-day purchases are up versus a year ago.
Italy watchdog drops fine after court ruling
Both the Amazon Access launch and the hiring freeze come as the tech titan dodged another antitrust bullet overseas.
An Italian administrative court scrapped a fine imposed by the country’s antitrust authority on both Amazon and Apple for alleged collusion, according to a Reuters report.
The Italian Competition Authority (AGCM) had fined both companies a total of more than 173.3 million euros (now $170.1 million) in 2021, citing alleged anti-competitive cooperation in the sale of Apple and Beats products.
After both companies appealed, the Lazio Regional Administrative Tribunal argued that the regulator hadn’t given the tech giants enough time to prepare their defense.
“We welcome the Court’s decision,” an Amazon spokesperson said in a statement to Sourcing Journal. “Our business model across Europe relies on the success of small and medium-sized businesses, and we will continue to work hard to provide a great selection from Apple, and the value and convenience that our customers love.”
Apple and AGCM have not publicly commented on the matter.
In January, the governing body had to recalculate the fines for both U.S. tech giants due to a “clerical error” in the first calculation, the agency said.
The latter fines instead amounted to 114.7 million euros ($114.3 million) for Apple and 58.6 million euros ($58.4 million) for Amazon, down from 134.5 million euros ($134.1 million) and 68.7 million euros ($68.5 million) respectively.
In 2018, the two companies announced a deal that would allow Amazon to sell iPhones, iPads, Macs and other devices on the e-commerce site. With the deal, Amazon exclusively enables a select group of “Apple Premium Resellers” within the Apple distribution system to sell its products. But critics allege that the partnership has excluded legitimate resellers of Apple and Beats products from Amazon’s marketplaces.
The clause was aimed at combating counterfeiting that plagued online marketplaces and that of Amazon in particular, ensuring that consumers could only buy original Apple products on the marketplace. The AGCM contended that the limitation violated competition by reducing the number of third-party resellers present in a relevant distribution channel.
European antitrust authorities in Spain opened a similar investigation into the partnership last year. Spain’s National Commission on Markets and Competition (CNMC) is still conducting a disciplinary investigation into both Amazon and Apple for “possible restrictive” competition practices.
Not only is the CNMC looking into potentially restricted third-party sales of Apple products on Amazon, but also the possible limiting of some advertising of competing Apple products and some campaigns directed at Apple customers by Amazon.
Amazon still isn’t off the hook with the Italian agency, which last December fined the company 1.13 billion euros, roughly equal to dollars at the current exchange rates, amid allegations that it had abused its market position by pushing third-party sellers to use its Fulfillment by Amazon (FBA) service.
The allegations are similar to several antitrust concerns that have dogged the e-commerce giant in the U.S., Europe and other major markets like India. Across the pond, Amazon is reportedly offering concessions to settle with the European Commission so that it won’t be fined as much as 10 percent of global revenue. Amid the ongoing investigations and complaints from consumer groups, Amazon recently agreed to make it less confusing for customers in Europe to cancel their Prime subscription.