After many refusals, anti-union behavior, espionage, criticism of journalists, strikes and dismissals of workers who tried to organize the rest to achieve better working conditions, Amazon agreed to improve the salaries of its workers this 2021. It allocated 4,000 million dollars to raise the salaries of its 1.6 million employees worldwide. Have your accounts suffered? It seems difficult to defend that this was the case. The company has published the results of its fiscal year of 2021, which show an increase in its net profit of 56% compared to 2020. The markets have rewarded it by increasing the company’s value on the stock market by 200,000 million dollars in a single day.
Are there a lack of waiters or a lack of living wages after the pandemic?
Amazon has gone from earning 18,677 million clean euros last year to 29,213 million this 2021. Its sales have risen 20% to 411,373 million, although its e-commerce business has been harmed by the omicron variant and its impact on the form casualties of infected workers and quarantines. “There are cases in which we pay two or three times for the same hour of work,” his financial chief complained during the presentation of the fiscal results in reference to this forced absenteeism due to the coronavirus.
To counteract this, the multinational hired 160,000 more workers in the last two months and improved the conditions of those already hired. In Spain, the wages of delivery men rose two euros an hour and hired 300 people. However, ómicron has not been solely responsible for these decisions. Amazon was losing workers due to the poor conditions it, like many other big companies, was offering employees earlier this year.
The process has been much more noticeable in the US, where it has acquired the status of a social movement and is known as “The Great Resignation.” Many workers have grown tired of the insufficient wages offered by big companies to less-skilled workers and quit their jobs. There are millions each month: according to the United States Department of Labor Statistics, 4.4 million workers were laid off voluntarily in November, October 4.2 or September 4.3. In total there are already almost 40 million in the US alone and a large part are women. Why? It is being investigated whether it is a consequence of the coronavirus (to care for family members or avoid contagion) or simply from being fed up.
In Spain, a similar situation occurred at the beginning of the tourist season, when hoteliers complained about the lack of waiters and these about the terrible working conditions of most of the offers. “Pay them more,” President Joe Biden recommended to companies like Amazon in the face of labor shortages. The multinational did it and its accounts have not suffered, but have skyrocketed. Among other things, because the company has also decided to raise the price of Prime (its subscription to have faster shipments and access to its content platform) by 17% for US users, an increase that could soon affect Europe. But also because the key to your business depends less and less on people.
The Real Amazon Deal
Within paradise there are also elites. The GAFAM (Google, Apple, Facebook, Amazon and Microsoft) are the most valuable companies in the world, but it is one thing to be Facebook and another to be Apple. The first has just suffered the biggest blow in its history on the stock market because its business, although huge and with legs in every corner of the network, is 98% concentrated on advertising based on the personal data that it extracts so much from its users as well as people who are not. There are actors who can stick their fingers in your eye, such as privacy regulators or manufacturers like Apple, which has closed the door on its devices and lost billions instantly.
It’s a problem Amazon doesn’t have. Amazon is the most important player in e-commerce in the Western world, but much more important than that is its growing weight in the cloud business, which is key in the digital society. Hundreds of thousands of companies and public institutions depend on Amazon Web Services (AWS) to support their entire online structure, while the company only depends on its own infrastructure to provide them with that service.
Amazon’s results presented this week reflect a 37% increase in AWS profits, consolidating it as the undisputed leader in the cloud sector ahead of Microsoft and Google. Four out of six digital services are served through AWS, and they are growing and bringing more and more benefits to you. This not only has economic consequences, but also social ones: Amazon has become one of the main funnels of global network traffic, so if its service suffers a failure it can drag half of the Internet with it.
Its dominance of the cloud business has shown that the multinational can survive even blows to its core business, such as e-commerce. Amazon is also the technological multinational that invests the most in R&D, with some 50,000 million euros this 2021. Alphabet (Google) remains at 25,000 and Meta (Facebook), Apple and Microsoft are below 20,000 million, as pick up The Economist.
Amazon is focusing on robotics, which will allow it to continue automating warehouses and shipping to get rid of more and more workers, but it is not its only interest. The company is betting heavily on space in a clear move to sustain its dominance of the Internet infrastructure in the event that it becomes dominated by minisatellites instead of submarine cables. Also for the electric and autonomous car, which could be in line with the possibility of applying this technology to deliveries.
This 2022 will be key in the future of the company. For one thing, it will be the first full year with Andy Jassy at the helm after founder and CEO of 27 years, Jeff Bezos, handed over the helm to him in July. Jassy (formerly the head of AWS) will have to continue to deal with worker complaints for better conditions.
This same Friday the vote of the employees of one of its department stores in Alabama (USA) begins to decide whether or not to form a union, after a plebiscite with the same objective was suspended last year due to “interference and interference” by the company. The electoral period will end on March 28 and if approved, it would be the first official Amazon union in the US.