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Case Details

Case Code: HROB203
Case Length: 18 Pages 
Period: 2015-2020   
Pub Date: 2019
Teaching Note: Available
Price:Rs.400
Organization : Amazon.com, Inc.
Industry :Retailing
Countries : United States, United Kingdom,Australia, Germany, France
Themes:  Industrial Revolution 4.0/ Ethics in Information Technology/ Compensation Policy/ Logistics & Supply Chain
Case Studies  
Business Strategy
Marketing
Finance
Human Resource Management
IT and Systems
Operations
Economics
Leadership & Entrepreneurship

Amazon.com, Inc. and the Human Cost of Fast Shipping

This case was a Finalist in the prestigious XVIII Dark Side Case Competition, 2019, organized by Critical Management Studies division of Academy of Management.
 
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EXCERPTS

DYSFUNCTION AT AMAZON?

 
In 2015, The New York Times published an article about how demanding Amazon was of its white-collar employees. The article reported, among other things, about the long hours, sometimes totalling 80 hours per week, that employees had to work; about employees being held to account for not replying immediately to emails that were sent to them past midnight; about the unfair treatment, including harsh performance appraisals, meted out to employees who were undergoing serious personal issues such as being afflicted with cancer or having a miscarriage; and about employees crying at their workstations. Following the article, which, according to observers, created a sensation, reports started emerging about the grueling work conditions at Amazon’s fulfillment centers...
 
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OTHER WORKERS JOIN IN

Over 30 individuals claiming to be Amazon workers in the US, the UK, and Germany reached out to Business Insider , which also published Bloodworth’s account, to narrate their experiences of working in Amazon’s warehouses. Business Insider verified some of their accounts by means of employment documentation and interviews. A former Amazon warehouse worker recounted that he suspected his co-workers urinated in the trashcans to avoid getting penalized for spending time going to the toilet...
 

MIRRORING THE EXPLOITION

In 2017, Alan Selby (Selby), a reporter for Sunday Mirror , worked undercover as a worker at Amazon’s warehouse in Tilbury, Essex . He initially worked as a picker. His work commenced with a robot pushing a tower of shelves toward him. He was given nine seconds to take and process each product to be sent for packing; this amounted to 300 products per hour. ..
 

DOWN UNDER

Amazon went live in Australia in December 2017. It opened its first fulfillment center in Melbourne. As was the case in other Amazon warehouses, the warehouse pickers were provided handheld electronic scanners that guided them to various aisles of the warehouse to collect items and put them in carts to be shipped to customers. As soon as a product was scanned, a solid bar at the bottom of the screen instantly began to count down, exhibiting the time the worker had to collect his/her next item, which could be located anywhere in the warehouse measuring 24,000 square meters. .
 

A DANGEROUS PLACE TO WORK?

In April 2018, the advocacy group, National Council for Occupational Safety and Health, included Amazon in a “Dirty Dozen” list of the most dangerous places to work in the US because of reported higher-than-average injury rates, unwarranted risks, and the company’s unwillingness to address workers’ grievances. According to the group, seven Amazon warehouse workers had died since 2013 and there was relentless pressure to cater to orders that resulted in harsh working conditions. ..
 

RAISING THE SCRUTINY?

In January 2018, various newspapers and news websites reported that Amazon had patented designs for a wristband that would emit ultrasonic sound pulses and radio transmissions to monitor where a warehouse worker’s hands were in relation to inventory bins and give haptic feedback to direct the worker toward the correct bin. According to Amazon, the objective was to streamline time-consuming activities such as responding to orders and packaging them for quick shipment. With the wristband’s direction, workers could complete orders faster. ..
 

DRIVING THEM MAD

In 2016, a BBC reporter worked undercover as a driver for one of the several agencies that provided Amazon drivers to deliver products to customers. On his very first day, he realized that Amazon did not factor in aspects such as tiredness and toilets when planning its delivery routes. Despite his efforts to drive and deliver as fast as he could while sticking to the speed limit, he was treated as being very slow. His co-drivers resorted to speeding. One particular driver said that to achieve the targets, he had to drive at 120 mph. Some of the drivers revealed that they urinated in a bottle in their van as they were short of time to find a toilet. Another conceded that he had once defecated in the back of the van. ..
 

LABOR UNREST IN EUROPE

While Amazon had a long history of thwarting unionization efforts in the US, it faced labor unrest in Europe where unionization was more widespread. In the US, Amazon thwarted internal unionization efforts through means such as hiring a powerful law firm to fight employees’ organizing efforts in 2014. The company advised its managers to nip in the bud any kind of union activity at the workplace. For instance, Amazon armed Whole Foods managers with a 45-minute video that instructed them to be alert to subversive phrases like “living wage”. They were also told that saying things like “Unions are lying, cheating rats” was within their legal rights. ..
 

MONEY MATTERS

Amazon was also criticized for the low pay received by its workers. In December 2016, reports emerged of at least a few Amazon workers at the Dunfermline warehouse living in tents near the warehouse, enduring sub-zero temperatures. The workers had apparently decided to live in the tents to save on transport costs. Private companies operated special buses to transport workers to the facility but charged up to £10 per day, which was more than the hourly wage the workers were being paid....
 

IS THE NOOSE TIGHTENING AROUND AMAZON?

According to observers, in the US, there was increasing pressure on Amazon to increase the wages of its workers and improve working conditions and at the forefront of this fight was Senator Bernie Sanders (Sanders). On Amazon Prime Day, he tweeted, “I stand with the Amazon workers fighting for decent working conditions and a living wage on #PrimeDay. While Jeff Bezos’ wealth increases by $275 million a day, Amazon workers are afraid to take bathroom breaks at work and are grossly underpaid.”.
 

A GLIMMER OF HOPE FOR THE WORKERS?

In October 2018, Amazon raised the minimum wages of its workers in the US and the UK. In the US, the minimum wage was increased to US$15 per hour. In the UK, the minimum wage paid to workers in London was increased from £8.20 to £10.50 per hour, while for the rest of the UK, it went up from £8 to £9.50. The increase was expected to benefit 250,000 workers in the US, 17,000 in the UK, and tens of thousands of seasonal workers. Sanders applauded Bezos for the wage hike and said, “…I want to give credit where credit is due.”
 

ONE STEP FORWARD, TWO STEPS BACK?

According to observers, the happiness of the workers at a pay hike was short lived with news emerging that Amazon had done away with stock option grants and variable compensation pay (VCP). The news, according to one Amazon worker, was akin to “a slap in the face.” ..
 

EXHIBITS

Exhibit I: Amazon’s Financial Snapshot (2010-2017)
Exhibit II: Some of Amazon’s Statements in Response to Bloodworth’s Allegations
Exhibit III: Allen’s Case
Exhibit IV: Some of the Details of Amazon Workers’ Dependence on SNAP