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E-commerce powerhouse Amazon plans to hire 3,000 corporate employees for its Boston-area operation, the company has announced.
The jobs will be distributed among different support teams to serve users of Alexa Smart Speaker, Amazon Web Service, Amazon Robotics, and Amazon Pharmacy (the company’s latest service created in November).
The new hires add to recent expansions by the company, which has become the second-largest employer in the United States after Walmart, with more than 800,000 jobs. In 2020, Amazon created more than 400,000 jobs, bringing its number of employees worldwide to more than 1.1 million.
Amazon’s Boston headquarters will be located in a 17-story building in the city’s port development area. The company said it was not receiving any financial incentives for its expansion.
The Boston-area hiring comes two years after Amazon’s withdrawal of its bid to establish a headquarters in New York City. The project promised to bring 25,000 new jobs to the city. The location proved ideal: Long Island City in Queens, a once-industrial neighborhood experiencing a new residential growth boom (between 2006 to 2018, 16,000 new residences were built).
However, far-left Congresswoman Alexandria Ocasio-Cortez (D-NY) led a strong campaign to keep this company from locating in Queens. In the end, the political pressure endured, Amazon ended up withdrawing its offer, and New York was left without 25,000 new jobs.
Due to the pandemic, the company has experienced unprecedented growth in demand for its services. Several of its products sold out during the Christmas season and had to be delivered late.
Amazon’s profits are estimated to grow by 35% in 2020 due to the increase of more than $380 billion in sales in e-commerce channels, while in 2019, online sales grew by 20%.
In his latest shareholder letter, Jeff Bezos stated that the company’s focus will continue to be on addressing the pandemic and taking advantage of the market opportunity it has created for the online retail giant.
Amazon has not only increased its workforce, but has kept most of its employees in offices when many other technology companies have opted for remote work. The company has set up its own laboratories to test, track and monitor any possible coronavirus outbreaks within its facilities.
During the pandemic, Amazon increased $2 an hour at all minimum wage positions at all of its locations, and doubled overtime pay, wage adjustments that cost the company about $500 million in April 2020 alone.
An end to exponential growth?
Despite its impressive growth during 2020, Amazon has become overly dependent on its sales within the United States. While in 2009, the international segment accounted for 48 % of its revenue, with the other 52 % coming from the US. In 2019, this segment generated 61 % of revenue, and the rest of the world accounted for only 27 %. Amazon Web Services’ cloud computing business accounted for 12 %, and other business lines accounted for the remaining 2 %.
This company’s heavy reliance on the U.S. market is significant, as it is rapidly saturating its domestic market. Even the most conservative third-party estimates put the company’s share of the U.S. e-commerce market at around 40 %.
Some analysts still remain skeptical about whether online sales will continue to have the growth potential they had during the pandemic. The e-commerce sales channel accounts for 14% of U.S. retail sales. Amazon has already decimated weaker competitors, so additional gains in this market will mean taking share away from retail giants such as Walmart, Target, and Cotsco.
Currently, the top 10 retailers’ sales value in the United States (including Amazon) exceeds $1.5 trillion. Amazon’s current market capitalization is around $1.6 trillion, but the company’s valuation is that it will continue to grow rapidly for much longer. However, with e-commerce saturated and other sectors barely representing revenue for Amazon, the tech giant’s share price is likely to start trending downward.
Economist, writer and liberal. With a focus on finance, the war on drugs, history, and geopolitics // Economista, escritor y liberal. Con enfoque en finanzas, guerra contra las drogas, historia y geopolítica