Market Overview

Amazon To Spend $700 Million To Retrain One-Third Of U.S. Workforce

Amazon To Spend $700 Million To Retrain One-Third Of U.S. Workforce, Inc. (NASDAQ: AMZN) said Thursday that it will spend $700 million through 2025 to elevate the job skills of one-third of its U.S. workforce. The program, called "Upskilling 2025," will include the training of employees to handle more complex logistics and transportation tasks.

The training program will be available to 100,000 employees across Amazon's U.S. system, the company said. Employees that acquire new skills would not be required to remain at Amazon, the company added. Amazon employs about 300,000 in the U.S., representing about half of its global workforce. 

Some of the programs will build on existing measures such as the pre-payment of 95 percent of tuition for fulfillment center workers looking to move into more high-demand jobs. Others are relatively new, such as "Machine Learning University," which offers employees with information technology backgrounds the chance to acquire machine learning skills, and "Associate2Tech," where fulfillment center workers without prior information technology experience are trained to move into technical positions.

Over the past five years, Amazon's fastest-growing highly skilled jobs have been in data mapping and science, systems analysis, process improvement, logistics coordination, and transportation specialist within its fast-growing fulfillment network. According to MWPVL International, a consultancy, Amazon operates 407 facilities of various types in the U.S., with 59 more slated to open at some point. 

The shortage of skilled American workers has become a major challenge for businesses as they transition to digital operations that require high levels of knowledge and expertise. Amazon cited data from the Bureau of Labor Statistics, a unit of the U.S. Department of Labor, that there are 900,000 more job openings across the U.S. than there are unemployed Americans. The ratio underscores the difficulty that employers have in finding applicants with the new-age skills they need.

That Amazon has decided to launch the program underscores the challenge that it faces in finding skilled labor, and that the most effective way to address the program is to look inside its own four walls for an eligible pool of workers.

In the increasingly high-tech world of material handling, where Amazon happens to be a major player, finding qualified employees is the biggest challenge businesses face. About 65 percent of respondents said that "tackling the supply chain skills gap and workforce shortage" is the biggest obstacle to adopting advanced technologies like robotics, artificial intelligence and machine learning," according to an annual survey published in March by the material handling trade group MHI and consultancy Deloitte.

Ibrahiim Bayaan, Freightwaves' chief economist, said Amazon is addressing a larger issue facing many American businesses, namely how to retrain its lower-skilled workers whose jobs its own technology is displacing. Such skills-improvement programs are not new either at Amazon or at many other companies, and it is unlikely to move the national needle, considering the millions of workers whose current jobs are threatened by automation, Bayaan said. "Still, I'd imagine these kinds of programs will become more common especially if the labor market remains generally tight, because finding these kinds of skilled workers is increasingly difficult," he said.

Separately, Amazon will open a 640,000 square-foot fulfillment center about 25 miles east of Atlanta in Stone Mountain, Georgia, in June 2020, according to published reports (Amazon did not respond to a request to confirm the story). The center will be the second in the metropolitan Atlanta area, after a location in Lithia Springs, about 25 miles from Atlanta to the west. That center opened in 2015.

The Stone Mountain center, which will fulfill small parcel orders, is designed to strengthen Amazon's ability to deliver quickly to high-density urban areas, according to reports. It is expected to provide about 1,000 jobs, reports said.

Image sourced from Pixabay

Posted-In: Amazon Freight FreightwavesNews General


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