Apr 3, 2020

Ubiquitous Amazon and our new COVID-19 life

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It's more than just stuff. It's web services, too.

As the country deals with the coronavirus outbreak, many people are doing more online shopping and relying on Amazon more than ever. The company has hired some 80,000 new workers to keep up with demand. On Thursday, following employee walkouts and protests, the company announced it would start taking warehouse employees’ temperatures at work and provide face masks.

Amazon is the topic for this week’s “Quality Assurance,” where we take a deeper look at a big tech story in the news. I spoke with Matt Day, who covers stories about Amazon for Bloomberg, and we talked about whether the company fits into that now-crucial designation of “essential.” The following is an edited transcript of our conversation.

Matt Day: Obviously, a good deal of Amazon is essential in these times, particularly if you’re somebody with mobility issues, you’re somebody who for health reasons doesn’t want to even take the risk of going into a supermarket or big-box store that remains open. You’re reliant on e-commerce, and in that regard, if you’re trying to get dry goods or hand sanitizer or wipes, chances are, you’re using Amazon. But one of the drawbacks that we’ve found in this environment — at least if you talk to Amazon’s workers — is that they’re still shipping a lot of nonessential stuff. Amazon’s digital doors remain open for books, for toys, games, for everything else that they have been selling online anyway. They’re still shipping that, and there are workers in facilities around the country still risking their own health going into work in the service of moving those goods to your door.

Kimberly Adams: We’re talking about e-commerce, but Amazon also has a lot of other businesses, right?

Day: Right. There’s a bunch of others that stand to likely benefit from this. One of them doesn’t get talked about quite as much as delivery, but [there’s] Amazon Web Services, their cloud computing group, which [is] essentially on-demand software or processing power. Businesses with employees working from home are making more use of that, analysts say. If you’re sitting at home watching Netflix or using a variety of internet services, a lot of the backbones of those live on Amazon Web Services. It’s the conventional wisdom that they stand to gain from this environment right now.

Adams: So many of our conversations are about what happens after we come out of this, even though it’s hard to even envision when that is, or what the world is going to look like at that point. But when we look at Amazon a year from now, what stories do you think you’ll be writing about this company and its business?

Day: I think we’re going to be writing about how this, as catastrophic an event as it’s proven to be globally, is the thing that Amazon was built for. They’ve spent most [of] the last decade building a giant logistics network in the U.S. and parts of Europe to really, [in] an unprecedented way, get goods to you quicker, to every doorstep they can access. They’ve been touting e-commerce since that term was new. I think in a lot of ways their company built to take advantage of this, and now it hasn’t been a glorious couple of months for them. They’ve had some complaints from workers about nonessential goods and the rate at which they’ve been working. There’s been the usual criticisms from U.S. senators about giving workers better pay, which has been an issue at Amazon off and on for a while. To a large extent, this company was designed to handle these challenges. If this indeed means a permanent increase in online commerce, Amazon would stand to gain a tremendous amount from it. The question is whether they’re able to capitalize on that the way their business leaders would hope or if some of the PR backlash related to some of these controversies hampers them.

Adams: We have seen protests this week by delivery workers and people working in Amazon’s warehouses. Will this have an effect on the company’s operations?

Day: The issue with Amazon and the workers who move items around their warehouses and who deliver those items [has] been a complicated story for a long time. One of the things this crisis is doing is some of those folks are kind of taking the opportunity to speak in a way that they haven’t before. There was a walkout in an Amazon warehouse just outside of Detroit, the third walkout in three days at an Amazon facility across the country. That’s just something you don’t see very often. So clearly workers who feel under extreme amounts of pressure themselves think that this is an opportunity for them to maybe ask things of management that would have been more difficult under business as usual conditions.

Some products on Amazon — regardless if labeled Prime — will take up to weeks to be shipped and delivered if they’re deemed nonessential goods during the coronavirus pandemic. (Sean Gallup/Getty Images)

Related links: More insight from Kimberly Adams

Matt Day recently wrote about Amazon’s surge in hiring to meet all the demand from people stuck at home due to the pandemic. Some of that hiring last month was happening at job fairs, where people weren’t exactly able to practice social distancing. Amazon said it’s since updated its recruiting strategies to, according to Day’s report, keep applicants safe. Both he and my colleague Andy Uhler covered those Amazon protests we were talking about.

Also watching

After years of negotiations — a lot of lawsuits, a Department of Justice investigation, millions of dollars in lobbying and some extra stays at the Trump Hotel — the merger between T-Mobile and Sprint is finally done. That deal is worth about $26 billion, and it leaves us with just three big wireless networks: AT&T, Verizon and T-Mobile. And no one else.

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The team

Molly Wood Host
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