Sign of Tight Labor Market, Strength of Ecommerce: Amazon to Hire 250,000 for Holidays, up from 150,000 Last Year, Boost Wages, Offer Sign-on Bonuses

While fewer and fewer Americans head to the malls.

By Wolf Richter for WOLF STREET.

Amazon announced in a blog post that it plans to hire 250,000 workers for the holidays, up from the 150,000 workers it said a year ago it would hire, and up from the 200,000 workers it said in 2019 it would hire.

These jobs will be “in full-time, part-time, and seasonal fulfillment center and transportation roles in hundreds of cities and towns across the U.S.,” it said.

And it said it’s going to pay them more – addressing the tightness of the labor market. It said it will raise “the average pay for those roles to over $20.50 per hour (a more than 50% increase over five years), with some locations offering as much as $28 per hour.” In addition, Amazon is offering “signing bonuses between $1,000 and $3,000 in select locations.”

Over the past five years, Amazon has added 800,000 workers, and so far this year, it said it “has opened over 50 new fulfillment centers, delivery stations, and same-day delivery sites in the U.S., resulting in hundreds or thousands of new job opportunities per site, depending on its size and location.”

This puts the layoff announcements of 18,000 in January and 9,000 in March into perspective, just trimming off some excess fat on the edges after the phenomenal hiring binge during the pandemic. Most of those layoffs were in their web services and technology divisions – including at its devices division which, outflanked by Apple and other device makers – has fallen on hard times.

Amazon said it is “now investing $1.3 billion this year toward pay increases for customer fulfillment and transportation employees.” A sign of just how tight the labor market still is.

Amazon’s announcement attests to the strength of ecommerce. In Q2, ecommerce retail sales were up 7.5% from a year ago, despite flat or dropping prices in many categories of goods that ecommerce retailers sell, as inflation has moved from goods to services.

The huge spike of ecommerce sales during the early parts of the pandemic was supposed to unwind afterwards, but never did, and instead became the base for additional growth:

Walmart, in a massive strategic shift years ago when it finally saw the writing on the wall – the brick-and-mortar meltdown, as I have been calling it since 2016 – has become the second largest ecommerce retailer in the US behind Amazon, booking huge growth rates each year with its ecommerce operations and reaching a share of 6.3% of total ecommerce sales in 2022, according to eMarketer. And it has become the largest grocery store by sales; it saw years ago that groceries, unlike most of its brick-and-mortar business, are largely immune to getting crushed by ecommerce.

Meanwhile, department stores and other mall stores have gotten crushed by ecommerce.

Target, which has also shifted to ecommerce, but less successfully, with a share of 2.1%, said that it would hire nearly 100,000 seasonal workers, about the same as in the prior two years.

Macy’s trimmed back its hiring plans to 38,000 this year, down from 41,000 last year. Macy’s is among a handful of surviving brick-and-mortar department stores and has been closing stores for many years, dramatically shrinking its brick-and-mortar footprint.

They’re all trying to shift to ecommerce. Macy’s used to be on the top 10 list of ecommerce retailers but has fallen off after shutting down its tech center and headquarters of in San Francisco just before the pandemic. Another brilliant move, it seems.

Ecommerce operations sell everything department stores sell, plus everything else that department stores don’t sell, with less hassles, and no driving or parking involved, straight to your door, and often at lower prices. Americans have changed how they do their shopping, including their holiday shopping: online.

As a result, countless regional and national department store chains have been liquidated in bankruptcy court, and all of the few survivors – including J.C. Penney, which was bought out of bankruptcy by the largest mall landlords in the US because they didn’t want the shuttered anchor stores to doom their malls – have been closing stores for years to shrink their footprint. Department stores are the core the brick-and-mortar meltdown.

And that business has walked off to ecommerce retailers, including the ecommerce operations of brick-and-mortar retailers.

And ecommerce continues to hit it out of the ballpark, even as brick-and-mortar department stores and other mall stores fade, and it doesn’t matter whether consumers are in a sour mood or not, and whether they plan to trim back their holiday purchases or whatever, they’re going to spend gobs of money online.

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  48 comments for “Sign of Tight Labor Market, Strength of Ecommerce: Amazon to Hire 250,000 for Holidays, up from 150,000 Last Year, Boost Wages, Offer Sign-on Bonuses

  1. rodolfo says:

    Amazon said it is “now investing $1.3 billion this year toward pay increases for customer fulfillment and transportation employees.” A sign of just how tight the labor market still is.

    Sure would seem that this type of wage increase will boost inflation as products and services become more costly. Let’s see what powwow has to say here any minute

    • ru82 says:

      Amazon also said they are having a hard time finding talent. Still a bit of a tight labor supply for specific talent it appears.

      Also, I read a report that the increase in consumer spending does not mean we are buying more stuff. The same amount of stuff is more expensive.

    • RH says:

      Russia just “temporarily” banned exports of diesel to the EU, reportedly. That will probably increase the severity of the EU recession, by a lot, if it continues for months. If our diesel goes to the EU, as prices rise worldwide, US transportation costs and thus, retail prices will climb even more. We will have Zimbabwe-style stagflation.

  2. Brooks says:

    Translation. MORE INFLATION, higher rates are here to stay.

  3. Brewski says:

    $28 an hour plus signing bonus.

    No wonder Amazon’s prices seem to be rising fast.

  4. Phoenix_Ikki says:

    haha if Pow Pow’s goal is to crush the job market to bring down inflation, then he failed miserably at it so far. If he announces no rate hike today then he can double down on that failure…

    Then again if his true intention is to create no or ultra plush landing by not rocking the job market and continuing to talk tough about seriously fighting inflation the he is doing a pretty fine job. After inflation hurts the lower class or aspiring future asset owners so him not really giving an F is probably more in line.

    • Not Sure says:

      His goal is not to crush the job market. His goal is (and has been) to inflate away the huge costs of the pandemic at a manageable rate and cruise into a soft landing where everything stays more expensive, but wages have risen to match those prices as inflation eventually cools to 2% and we find a new normal equilibrium with the $5T+ we added to the money supply. Icing on the cake would be to pull it off without a huge recession. That would be the Fed’s perfect outcome.

      Prices ebb and flow with booms and busts, but over the long haul, price rises match the increases in money supply that exceed real growth in the economy. Even with QT, we’ve grown our money supply by about 35% in a few years. It should be no surprise that life is about 35% more expensive now. That was the Fed’s plan all along. So far, they’ve pulled off their heist surprisingly smoothly.

      • Einhal says:

        Yep, and all retirees who tried to save some money saw it devalued by 35% so that we could give trillions out to people and businesses that didn’t need it. Lovely.

    • Herpderp says:

      Powell operates under a dual mandate. Protect asset prices and give lib service to fighting inflation. Hes been doing an incredible job.

  5. Gary says:

    Seems like a Federal sales tax could calm down Ecommerce, reducing the tight labor market like Jerome Powell says and helping with the budget deficit. These products aren’t like food necessities do it is not a regressive tax.

    • El Katz says:

      Isn’t Instacart and Amazon Grocery/Fresh considered “ecommerce”?

      Once you start carving out loopholes, all bets are off.

  6. Debt-Free-Bubba says:

    Howdy Lone Wolf. Sorry for off topic. Will wait all day for your FED report.
    THANKS in advance…. Too excited to wait to post something….

    • GISELLE USHER says:

      Hello Bubba,

      I like your no nonsense comments…even this “off topic waiting to post” peaks my anticipation for your comment after Wolf’s report (yes Wolf, Sir, I do read you 1st in its entirety).
      Thank you both for your cogent content.

      I’m a newbie / novice, practically a virgin in the world of finance, just trying to learn as much as possible before jumping in.
      Having accidentally stumbled onto Wolf Street (completely sober) a few months ago, I do feel fortunate despite my lack of a “fortune”.

  7. William Leake says:

    As rampant crime has moved to brick and mortar stores in urban areas, shoppers are more likely to use delivery services. Nobody wants to get caught up in a smash and grab or watch shoplifters just walk out the door. Shrinkage will cause shrinkage of numbers of brick and mortar stores, at least in urban areas. E-commerce is not just more convenient, it is now safer. Walmart and Amazon know this.

    Unless crime is somehow reduced significantly, downtowns and strip malls will go the way of the big malls. Cities and towns will lose tax revenue and continue to spiral down to hellholes and criminals will have to take their action out to the suburbs, as they are doing now.

    • Arnold says:

      Property crime rates in American cities are 28% lower than 10 years ago.

      Mobile, Alabama ranks first for murder, rape, aggravated assault, burglary, and larceny rates. Coach Tuberville needs to get to work.

      • El Katz says:

        The “crime rate” is only down because many crimes are no longer reported. Friends have had porch pirates rip off their food deliveries (Instacart), Amazon packages, etc., ad nauseum. They live in Long Beach, CA. Their Ring camera recorded the perps.

        Long Beach police didn’t even bother to respond on any of multiple occasions. They told them that it’s a waste of police resources and the DA will let them walk anyway as it’s under the $950 threshold. Our friends don’t even bother to report it anymore.

        Figures don’t lie. Liar’s figure.

        • Digger Dave says:

          It is a waste of resources to have the police going after petty theft. This type of theft is a result of a societal break down – Americans move often and are spread out and family and community bonds are broken (nevermind the demands of poverty and housing on many marginally employed people). I’ve always thought, at least for retail companies, that if they move into towns, decimate small businesses, negotiate favorable tax rates then tie up the local police department with $75 shoplifting claims then they should either cover the cost for their own dedicated officers or have to use the civil system to purse.

      • rick m says:

        There’s a multiplicity of worst-city-for-your-calamity-of-choice lists. Just for murder, I found St Louis, New Orleans and Baltimore in the first couple of goog results. Since I’m flying from New Orleans to Baltimore in a few weeks, I’m rooting for Mobile. It’s an hour away, I stay west of I-65 and haven’t ever had any problems there. No doubt they have terrible crime stats. But these endless lists have become just more misleading
        internet dross.
        The scary neighborhoods sometimes get urban pioneers with restoration money, and end up pricing the criminals out. South Dallas and East Austin have gone through that since I lived there.

        • El Katz says:

          Watched a show featuring an “urban pioneer” last night while “bonding” with the spousal unit. The person renovating the structure had the condensing unit for the A/C wrapped in chains anchored into concrete sonotubes buried in the ground. That was a first!

        • ChangeMachine says:

          But were those neighborhoods just “born bad”? Or were they formerly decent neighborhoods that went downhill during periods of social decline?

      • John in Indy says:

        I would say that REPORTED property crimes may be down, but with major cities only taking robbery reports via 311 instead of 911 (Baltimore), and taking 2 hours to respond to armed robbery calls (Chicago), and the prosecutable dollar limit for shoplifting has been raised so much, there may other reasons for a lower number of reported property crimes, as is noted by others below.

    • Swamp Creature says:

      In Washington DC 25% of the Amazon packages that are delivered to homes are stolen right on the customer’s doorstep. So, if you think you are avoiding crime at the malls by ordering online, you can think again.

      Note that Amazon photographs the items when they are delivered so if you try to get them to pay a claim then you are SOL (S$it out of luck).

      • El Katz says:

        You pay by credit card. Dispute it with the card issuer. Worked for me.

      • William Leake says:

        Swamp, Washington DC is one of those hellholes. It will not get better. It will get worse. Move. Katz is right about credit cards, just take the matter to them.

        I live in the East Bay, but not close to Oakland or Berkeley. I have not lost any packages (Amazon and Instacart mainly), except those delivered by UPS, whose drivers I suspect stole them. If a vendor says he only uses UPS is say to him, forget it, I do not use UPS.

        Like Katz, I gave up on brick and mortar, when I can get sexactly what I want delivered by Amazon the next day (sometimes the same day).

    • Keith says:

      I think this is just an extension of the work from home mantra, why waste time with nonsense- fighting crowds, searching, waiting in lines, etc, when you can outsource it for free and recoup that time for other purposes, enhancing quality of life.

      For me, the only things I really neeed to do in person shopping is food, lumber, and gasoline; and I am hoping for delivery for that (hopefully the crew from Sunny in Philly will start servicing my area 😀)

      • El Katz says:

        Stores don’t stock much variety nor depth of inventory anyway. Stupid things like filters for our HVAC. Our size is sold out everywhere. Amazon has them. Delivered the next day for less than Ace. Cerave soap, our dentist’s recommended mouthwash (CVS doesn’t stock it… Walgreens usually stocks 3 bottles and is consistently sold out). A certain size/thread of cabinet levelers for my speakers (came with spikes that wreak havoc on a tile floor). Nowhere to be found (Ace, Blows, Home Despot). Amazon had them here the next AM. Parts for sprinkler valves. The only place nearby that handles Irritrol is Ewing and they don’t do retail. Amazon? Boom. Next day.

        It’s getting so that I don’t even bother to go to brick and mortar anymore…. The time wasted running around looking for things that aren’t in stock, the gasoline (at $6 a gallon)…. fuggedaboudit.

        • MussSyke says:

          And workers at Home Depot have told me the in-store selection has gotten slimmer since they have so much online. That can be annoying in the case where you need to go piece together parts in person.

          I love HD online, though. I’ve never gotten counterfeit stuff from them, whereas Amazon always tries to stick me with fake items (including safety devices, like CAFCI breakers). I actually really hate Amazon anymore, with all its ads, deceit, and multi-branded trash items.

        • 91B20 1stCav (AUS) says:

          …what is the term? Oh, yeah, ‘race to the bottom’.

          (…in earlier days, always admired the entrepreneurial bent of some street urchins in the second-world country I happened to be in of their conviction that I would buy some Chiclets. I always hope at least some of them made it. More whole-world commerce headed this way?

          For the great number of humans, there must be work, and for a ‘successful’ nation that work must pay their general population in some sufficient and tangible manner (I acknowledge what is ‘sufficient and tangible’ is always subject to intense debate) that keeps them willing to maintain their skin in the game of national polity. Given our own national species’ contemporary bent towards constantly-reducing our reliance on each other while breezily-dismissing any ‘collateral damage’ while ‘running fast and breaking things’, I sense the resulting surplus population has noticed a looming shadow of history’s rolling wheel…).

          (…usual too-wordy rant over, apologies…)..

          may we all find a better day.

  8. THEWILLMAN says:

    Also says they see continued strength in consumer spending…

    A bigger slice of a bigger pie.

  9. prrd says:

    ‘Amazon announced in a blog post that it plans to hire 250,000 workers for the holidays’

    Amazon must have smelt the odor from the very many drunken sailors planning to go gang busters for the holidays.. question is, how would the post martyrdom would feel like once the hang over settles in jan feb next year.

    • Butters says:

      Announce 250000 hire only half or less.

      Same game every time.

      I’m still waiting for the drone deliveries. When will the happen?

  10. Swamp Creature says:

    I’ve even started buying clothes and hardware items through mail order catalogs. Got some good items this way. It’s not on-line and not brick & mortar. I wonder what category of retail sales this falls into. Anybody know?

    • ru82 says:

      I read the Dollar Stores next challenge will be the competition from the cheap online Chinese discount stores like TEMU.

      I guess just skip the middleman which is Dollar Stores

  11. Ted T. says:

    I used to buy levi’s jeans at Macy’s but every time I tagged along with my wife, they didn’t have my size or style. So recently I saw an article in the WSJ (which Wolf says don’t know anything) and it said that Levi’s was investing in its web site to sell more online. I ordered two pairs and when I got them one was defective. So my wife says, hey they have a store at the mall! Sure enough I found the store and they had exactly what I wanted. Get this, I paid $50 bucks online and the store sold me a pair for $37.50 and I got to inspect them and try them on. Guess where I’m going next time?

  12. rodolfo says:

    Pressor over. Powell sounds reasonable again and capable of answering questions well.

  13. The Liberty Advocate says:

    You definitely have to be able to change with the times, like Kohl’s has, with making it the go to place to return Amazon purchases, getting foot traffic in the door.

    As to the article, very interesting. I am guessing Amazon sales will be lackluster and they will be doing a significant reduction within the next six months (getting rid of more than the 250,000 hired). Of course the depression isn’t going to hit until the end of next year or first part of 2025, so maybe we will have to wait until then.

    • El Katz says:

      The local UPS stores are starting to refuse Amazon returns….. so Amazon’s signed up other retailers. I guess Staples took the bait as they are not only taking packages, but giving out coupons (I think $10 off $50 or something like that) if you bring them an Amazon return.

    • Wolf Richter says:

      Your reference to Kohl’s is funny. Kohl’s revenues have dropped 10% since 2019, despite four years of inflation. To just $18 billion in the last fiscal year. That’s tough to beat, LOL

      Amazon’s revenues have nearly DOUBLED over the same period to $514 billion (half a trillion)!

      The only reason why Kohl’s revenues didn’t drop further is because of its ecommerce business. Those stores are dead.

      • The Liberty Advocate says:

        I sure hope they aren’t dead! I hate shopping for clothing online.

  14. Flashman says:

    J C Penny was advertising on Thursday night football. Programing carried by Amazon. I was surprised J C Penny was still in business Now thanks to Wolf I know why they are still in business.

  15. josap says:

    When I can browse different types, models, prices online from the comfort of my home, it’s the best way to shop. I’ve been doing this for a long time. During covid even groceries were delivered (neighbor had brain cancer so we were super extra careful).

    Takes me less time to find what I want at a good price point from home than heading out to hunt at stores.

    • LaughingLion says:

      And stores make it hard on themselves by stocking poorer and poorer selections of crummier and shoddier merchandise.

      I hope your neighbor is doing better, josap.

Comments are closed.