In his last shareholder letter as CEO, Jeff Bezos acknowledged both the highest of the highest for the e-commerce giant as well as its shortcomings, particularly related to how the company treats employees.
While Bezos largely defended the company’s practices throughout the letter, highlighting an internal survey of fulfillment center employees which reported that 94 percent say they would recommend Amazon to a friend as a place to work, and reiterating the 30-minute lunch and 30-minute break built into employee schedules, he made one notable concession: “it’s clear to me that we need a better vision for how we create value for employees—a vision for their success.”
With that acknowledgement, Bezos said in his upcoming role as executive chair, he will prioritize his commitment to making Amazon “Earth’s Best Employer and Earth’s Safest Place to Work.”
“The fact is, the large team of thousands of people who lead operations at Amazon have always cared deeply for our hourly employees, and we’re proud of the work environment we’ve created,” Bezos said in the letter. “We have always wanted to be Earth’s Most Customer-Centric Company. We won’t change that. It’s what got us here. I’m excited to work alongside the large team of passionate people we have in ops and help invent in this arena of Earth’s Best Employer and Earth’s Safest Place to Work.”
In 2021, Amazon will invest more than $300 million into safety projects throughout the workplace, including an initial $66 million to create technology that will help prevent collisions of forklifts and other types of industrial vehicles.
On the safety front, Bezos emphasized the need to invent solutions to reduce musculoskeletal disorders (MSDs) like sprains or strains that can be caused by repetitive motions, especially for new employees who may be working in a physical role for the first time. He said that 40 percent of work injuries at Amazon are related to MSDs. Through the WorkingWell coaching program and increased attention to prevention, overall MSDs decreased by 32 percent from 2019 to 2020 and MSDs resulting in time away from work decreased by more than half.
Bezos revealed that Amazon terminates less than 2.6 percent of employees due to their inability to perform their jobs, with that number coming in even lower in 2020 because of operational impacts of Covid-19.
The CEO also harped on the impacts of Amazon’s $15 per hour minimum wage, which he said was implemented “because we wanted to lead on wages—not just run with the pack—because we believed it was the right thing to do.” Bezos cited a paper from economists at the University of California-Berkeley and Brandeis University, which said the raise resulted in a 4.7 percent increase in the average hourly wage among other employers in the same labor market.
The letter comes in the wake of last Friday’s defeat of a unionization drive at a Bessemer, Ala., warehouse, in which 1,798 votes against unionizing overwhelmingly surpassed the 738 votes in favor of joining the Retail, Wholesale and Department Store Union (RWDSU). Nevertheless, the drive was the most visible and forceful attempt in Amazon’s history to organize one of the company’s workplaces, none of which has ever unionized.
Stuart Appelbaum, president of the RWDSU, which had backed the Bessemer employees who started the unionization push, responded to the letter.
“The impact on Amazon’s reputation by this campaign has been devastating, regardless of the vote result,” said Appelbaum. “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 the voting results were revealed, the RWDSU filed charges with the National Labor Relations Board (NLRB) alleging that Amazon interfered with the right of the Bessemer employees to vote in a “free and fair election.”
Appelbaum accused Amazon of numerous acts that could potentially have swayed voter opinion, such as requiring all their employees to attend lectures “filled with mistruths and lies, where workers had to listen to the company demand they oppose the union,” spreading misinformation via social media and advertising, and even lying about union dues in a right-to-work state.
In a video circulated on social media, RWDSU council president Randy Hadley claims Amazon “actually had the city to come out there and recalibrate the red lights so they can’t stop and chat with us,” though the City of Bessemer dismissed any link between changes to the traffic signals and anti-union activity.
In the letter, Bezos noted that he didn’t take comfort in the union vote outcome, despite it being “lopsided.”
Bezos touched on other parts of the business throughout the letter, officially revealing that Amazon now counts 200 million Prime subscribers, up from 150 million at the beginning of 2019. On Dec. 31, Consumer Intelligence Research Partners (CIRP) estimated that there were 142 million Prime members in the U.S. He lauded how the experience has saved consumers time and money, indicating that customers complete 28 percent of purchases on Amazon in three minutes or less, and half of all purchases are finished in less than 15 minutes.
He also addressed The Climate Pledge, which Amazon launched in collaboration with social and environmental stewardship group Global Optimism. The pledge calls on signatories to achieve net zero carbon emissions by 2040—a full decade ahead of the Paris Agreement’s goal of 2050. Amazon is “making progress” toward its own goal of 100 percent renewable energy by 2025, five years ahead of its initial 2030 target, Bezos said.
Bezos will officially transition into the executive chair role in the third quarter. Taking his place will be long-time right-hand man Andy Jassy, currently CEO of Amazon Web Services (AWS).