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Amazon sheds 27k employees in Q1 in return to traditional post-holiday jobs pattern

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Amazon’s total number of full- and part-time employees fell to 1.271 million people in the first quarter of 2021, down 27,000 positions from the fourth quarter of 2020, according to numbers released Thursday along with the company’s blockbuster earnings report.

In raw numbers, it’s the largest quarter-over-quarter employment decline in Amazon’s history. But flat or declining employment has been a common pattern for the e-commerce giant in the first quarter in years past. That’s because it follows the peak holiday quarter, when Amazon boosts staffing at its fulfillment and distribution centers.

In that way, the raw size of the first-quarter decline speaks more to the company’s sheer size, resulting from years of meteoric growth overall. The most recent quarterly decline translates to a little more than 2% of Amazon employees, making the drop lower than in some recent years on a percentage basis. The numbers do not include temporary or contract workers.

Amazon CFO Brian Olsavsky. (Amazon Photo)

The first quarter of 2020 was an exception to the normal post-holiday pattern, when Amazon added more than 40,000 employees in preparation for booming demand for online shopping amid stay-at-home orders in the early days of the pandemic.

“The usual step-down from the Q4 peak was was masked last year,” said Brian Olsavsky, the company’s chief financial officer, on a call with reporters.

Amazon this week announced that it will be moving up the schedule for pay raises for operations workers, spending $1 billion on wage increases for 500,000 operations workers, promising raises of between 50 cents and $3 an hour.

The announcement comes after Amazon prevailed over a high-profile union push at its Bessemer, Ala., fulfillment center.

In his final shareholder letter as CEO, earlier this month, Amazon founder Jeff Bezos wrote, “Despite what we’ve accomplished, it’s clear to me that we need a better vision for our employees’ success.” He promised that Amazon will be “Earth’s Best Employer and Earth’s Safest Place to Work” in addition to its longstanding claim as “Earth’s Most Customer-Centric Company.”

A New York Times reporter, Karen Weise, asked Olsavsky on the media call if Amazon was allocating a specific budget to that pledge.

“What [Bezos] meant by that, and what he tried to reiterate, is our commitment to safety and the health and welfare of our employees,” Olsavsky said. “In his shareholder letter, in his comments, Jeff was just reiterating that, and reiterating it internally as much as externally.”

Retailers, restaurants and other businesses in some regions have struggled to find workers as they emerge from the pandemic. Employers say the extension of unemployment benefits and government relief programs is reducing the incentive for some people to return to work. But responding to a question from GeekWire, Olsavsky indicated that it isn’t a major concern.

“Obviously, the economy is starting to open up, and there’s a lot of need for new employees for a lot of different industries, and a lot of industries that some of our employees came from are now reopening,” he said. “But having said that, we have hired over 500,000 people in the last year, in 2020, 400,000 of them in our operations and logistics area. So we feel we have still a very competitive package of pay and benefits to offer.”

In related news, Amazon said more than 100,000 people are now employed by Delivery Service Partners companies, independent businesses that contract with Amazon to deliver packages in Amazon-branded vans and uniforms. The program launched in 2018.

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