Jeff Bezos has revolutionised the way business is done
Despite its innovation, Amazon needs to focus on improving how it looks after its staff
Jeff Bezos. Photograph: AFP via Getty
When I first started covering technology, not that many people had a mobile phone, computer programmers were starting to worry about Y2K and Amazon was just on the rise.
Quaint as it seems now, its full name at the time was still Amazon dot com and it only sold books. The debate raged in newspapers, magazines and online over how long traditional bookshops would sputter on for before they all shuttered their doors for good.
As it turns out, bookshops have survived Amazon’s onslaught, at least to some degree. What we didn’t realise back then was that the company wasn’t just turning book selling on its head, but was planning to upend the retail of everything.
Consumers have long been able to buy everything from fresh food to Nazi memorabilia via the main Amazon site, with easy one-click purchasing making it hard to resist.
Bezos’s wider empire now encompasses, among other things, a hugely successful cloud computing business (Amazon Web Services), a national newspaper (The Washington Post), and a digital streaming service (Amazon Prime).
Separately, Bezos also owns space exploration company Blue Origin, on which he is expected to spend more time once he shifts to become Amazon’s executive chairman.
Along the way, he has revolutionised the way business is done. Some of this has been achieved through embracing technology to improve processes, such as Amazon’s widespread adoption of artificial intelligence (AI) and machine learning internally.
Bezos has built a $1.7 trillion (€1.4 trillion) business that is thriving on the back of the Covid crisis, recording $125.6 billion in sales for the last three months of 2020 alone. It has made the 57-year-old a very rich man with a $196.2 billion fortune, second only to Elon Musk.
“Amazon is what it is because of invention,” Bezos told employees in an email announcing his departure this week. “If you do it right, a few years after a surprising invention, the new thing has become normal. People yawn. That yawn is the greatest compliment an inventor can receive. When you look at our financial results, what you’re actually seeing are the long-run cumulative results of invention.”
It is tempting to agree. But doing so also ignores how Bezos’s ruthlessness has steered the business to success. After all, he used to hold meetings at a Barnes & Noble store, one of his biggest bookselling rivals, in Amazon’s early days. The guy hardly lacks chutzpah.
Even his early focus on bookselling wasn’t random. Books have a low unit price and high margin, there are millions of titles with which to tempt people, and customers don’t need to feel or touch them before buying, so he figured they were perfect for selling online.
Despite the high-tech innovation, Amazon still operates in many instances much like a traditional business, happily elbowing rivals out of the way and exploiting sellers by, for example, replicating their products and retailing them for a lower cost. Meanwhile, the company has arguably been among the worst in terms of looking after its staff.
There have been multiple instances of unethical practices going on in Amazon warehouses or “fulfilment centres” as the company insists on calling them. Evidence gleaned from a large number of undercover investigations show that they are certainly not fulfilling places to work for staff.
Among the allegations are tales of employees urinating in bottles because they were concerned they didn’t have enough time to take proper toilet breaks. There is this and much more.
Late last year, it was disclosed that Amazon, which employs one million million, had nearly 20,000 warehouse staff who tested positive for coronavirus. More recently, it has been reported the company is intensifying attempts to stop such workers from unionising.
And it’s not just the warehouses. The New York Times and others have previously reported on the cut-throat environment for office staff in which they were encouraged to tear one another apart in meetings and work long hours far beyond the norm.
All of this has taken place under Bezos’s watch and there is little evidence to suggest any of it has greatly upset him. It has certainly done no harm to the bottom line. But concerned consumers are increasingly unhappy at the notion of buying from a behemoth that has such poor alleged treatment of staff. Can we really enjoy our bargains when they cost so much.
Bezos’s departure leaves just Mark Zuckerberg alone among founders of the big tech giants that are still leading the company. But just as Apple CEO Steve Jobs and Google founders Larry Page and Sergey Brin had succession plans in place, so does Amazon.
Andy Jassy, up to now head of Amazon Web Services, is taking over the hot seat. No one expects Jassy to be given a free rein and nobody thinks the company will change its ways anytime soon.
Many Irish customers have been willing to ignore Amazon’s shoddy work practices up until now.
With much interest and excitement over the company reportedly setting up a fulfillment centre locally, meaning faster local deliveries and potentially more services on offer here, how it treats its employees will come more into focus however. Can it deliver satisfied staff as well as contented consumers?