6 ms·

"Afford" is a very relative term. They don't want to be responsible for that many FTEs but with $48 billion in gross margin and $2.5 billion in net income, they

"Afford" is a very relative term. They don't want to be responsible for that many FTEs but with $48 billion in gross margin and $2.5 billion in net income, they can certainly afford to employ a few thousand seasonal workers year round.

krapp 9y ago
That's true. Amazon has "frugality" as a core cultural value - a valid definition of "can't afford it" for them is "just don't want to pay for it."
- FussyZeus 9y ago
  In my experience, this doesn't make them that different from virtually any corporation. I don't think I've ever worked for one where getting money for literally anything wasn't a constant uphill battle (which incidentally is why so many consumer electronics feel cheap as shit; they are).
  - microcolonel 9y ago
    > In my experience, this doesn't make them that different from virtually any corporation. For that matter, not any different from a typical person. Expenses that you would be better off not incurring are, by definition, frivolous. In the case of Amazon, frivolous spending at any level changes the price at which they can achieve a fair margin and reduces customer satisfaction.
    - FussyZeus 9y ago
      Except Corporations take it to a uniquely stupid level; things like refusing to pay adequately for internal support, security, auditing, i.e. anything that doesn't have a direct impact on customers.
      - microcolonel 9y ago
        Who are you to say what is the right amount to pay for security? Do you know how much life insurance I should have?
        FussyZeus 9y ago
        Every year I need to have usually a 2 hour meeting with my superiors to argue for renewing our antivirus for our Windows infrastructure. Their constant argument every time is "we have no viruses, why do we spend money on this" and I have to tell them every single time "that you're paying for it is WHY we don't have viruses." They have no idea what viruses are, what malware is, what ransomware is and despite being hired to maintain infrastructure, I must continuously explain my decisions to people who do not maintain infrastructure and wouldn't know how with a gun to their head. This, to me, is stupid.
        microcolonel 9y ago
        Fair enough, but at the end of the day you do convince them, which is why they pay for you. ;- )
        TeMPOraL 9y ago
        Indeed. Unfortunately, this is the problem universal to everything infrastructural - people don't value it when it works.
        JumpCrisscross 9y ago
        > They have no idea what viruses are, what malware is, what ransomware is and despite being hired to maintain infrastructure, I must continuously explain my decisions to people who do not maintain infrastructure and wouldn't know how with a gun to their head Nobody hires someone outside their domain of expertise and then leaves them to do whatever. Your constantly justifying your recommendations is, like it or not, a critical part of your job.
        FussyZeus 9y ago
- im3w1l 9y ago
  If they can't, then that's the end of that. If they just don't want to, they can be strongarmed.
  - killjoywashere 9y ago
    Are you suggesting they should be strong-armed into employing underutilized employees? Perhaps we could do that for the finance industry too. Really, by that logic, any company making money should be strong armed into excess hiring. I suppose they could also push for increased wages instead, which seems more tenable once you get close to full employment.
- skookumchuck 9y ago
  Isn't that true for all of us?
asddddd 9y ago
> a few thousand seasonal workers year round. You're vastly underestimating what sort of effects "peak season" has. UPS hires 95,000 temporary employees each year; FedEx hires 50,000. Amazon hires 120,000. Retail scales up similarly, but I'm less familiar with the industry. "A few thousand" is how much single distribution centers scale up employment.
- mikeyouse 9y ago
  I think you're vastly underestimating how much money Amazon makes. So Amazon currently hires 120,000 people at $12/hr for 10 weeks for a total cost of somewhere near $576M. This counts as COGS and is included in their gross margin. If we just multiply that figure by (52 / 10) and subtract out the $576M, we can see that it would decrease their annual Gross Margin by $2.5B. Add on an additional 30% of the combined $3B in salary expense since I doubt the temp workers get benefits, and you'd be looking at a total of ~$3.4 billion. So in 2016, this would've changed their gross income from $47.7 (35% GM) billion to $44.3 billion (32.5% GM).
  - Veelox 9y ago
    That $3.4 billion puts their net income negative for the year negative.
    - mikeyouse 9y ago
      Right, but net income is a fiction to begin with. It has almost nothing to do with a company's actual health. Last year was the first year that Amazon ever showed a NI over a few hundred million (for most of their life, it's been negative). https://a16z.com/2014/09/05/why-amazon-has-no-profits-and-why-it-works/ https://a16z.com/2014/09/05/why-amazon-has-no-profits-and-wh...
sol_remmy 9y ago
Your saying they should employ a "few thousand workers" unnecessarily from January - October for moral reasons I wonder if you would still act so idealistically if you held stock in the company..
- mikeyouse 9y ago
  I wasn't saying they should employ them for moral reasons, I was saying that they absolutely could afford to do so. Side note; I do hold stock in the company, and because I'm not an asshole, I do think they should rely less on temp labor and they should improve working conditions for their existing warehouse workers. Even if it reduces my capital gains by some fraction of a percent.

krapp 9y ago

That's true. Amazon has "frugality" as a core cultural value - a valid definition of "can't afford it" for them is "just don't want to pay for it."

FussyZeus 9y ago
In my experience, this doesn't make them that different from virtually any corporation. I don't think I've ever worked for one where getting money for literally anything wasn't a constant uphill battle (which incidentally is why so many consumer electronics feel cheap as shit; they are).
- microcolonel 9y ago
  > In my experience, this doesn't make them that different from virtually any corporation. For that matter, not any different from a typical person. Expenses that you would be better off not incurring are, by definition, frivolous. In the case of Amazon, frivolous spending at any level changes the price at which they can achieve a fair margin and reduces customer satisfaction.
  - FussyZeus 9y ago
    Except Corporations take it to a uniquely stupid level; things like refusing to pay adequately for internal support, security, auditing, i.e. anything that doesn't have a direct impact on customers.
    - microcolonel 9y ago
      Who are you to say what is the right amount to pay for security? Do you know how much life insurance I should have?
      - FussyZeus 9y ago
        Every year I need to have usually a 2 hour meeting with my superiors to argue for renewing our antivirus for our Windows infrastructure. Their constant argument every time is "we have no viruses, why do we spend money on this" and I have to tell them every single time "that you're paying for it is WHY we don't have viruses." They have no idea what viruses are, what malware is, what ransomware is and despite being hired to maintain infrastructure, I must continuously explain my decisions to people who do not maintain infrastructure and wouldn't know how with a gun to their head. This, to me, is stupid.
        microcolonel 9y ago
        Fair enough, but at the end of the day you do convince them, which is why they pay for you. ;- )
        TeMPOraL 9y ago
        Indeed. Unfortunately, this is the problem universal to everything infrastructural - people don't value it when it works.
        JumpCrisscross 9y ago
        > They have no idea what viruses are, what malware is, what ransomware is and despite being hired to maintain infrastructure, I must continuously explain my decisions to people who do not maintain infrastructure and wouldn't know how with a gun to their head Nobody hires someone outside their domain of expertise and then leaves them to do whatever. Your constantly justifying your recommendations is, like it or not, a critical part of your job.
        FussyZeus 9y ago
im3w1l 9y ago
If they can't, then that's the end of that. If they just don't want to, they can be strongarmed.
- killjoywashere 9y ago
  Are you suggesting they should be strong-armed into employing underutilized employees? Perhaps we could do that for the finance industry too. Really, by that logic, any company making money should be strong armed into excess hiring. I suppose they could also push for increased wages instead, which seems more tenable once you get close to full employment.
skookumchuck 9y ago
Isn't that true for all of us?

asddddd 9y ago

> a few thousand seasonal workers year round. You're vastly underestimating what sort of effects "peak season" has. UPS hires 95,000 temporary employees each year; FedEx hires 50,000. Amazon hires 120,000. Retail scales up similarly, but I'm less familiar with the industry. "A few thousand" is how much single distribution centers scale up employment.

mikeyouse 9y ago
I think you're vastly underestimating how much money Amazon makes. So Amazon currently hires 120,000 people at $12/hr for 10 weeks for a total cost of somewhere near $576M. This counts as COGS and is included in their gross margin. If we just multiply that figure by (52 / 10) and subtract out the $576M, we can see that it would decrease their annual Gross Margin by $2.5B. Add on an additional 30% of the combined $3B in salary expense since I doubt the temp workers get benefits, and you'd be looking at a total of ~$3.4 billion. So in 2016, this would've changed their gross income from $47.7 (35% GM) billion to $44.3 billion (32.5% GM).
- Veelox 9y ago
  That $3.4 billion puts their net income negative for the year negative.
  - mikeyouse 9y ago
    Right, but net income is a fiction to begin with. It has almost nothing to do with a company's actual health. Last year was the first year that Amazon ever showed a NI over a few hundred million (for most of their life, it's been negative). https://a16z.com/2014/09/05/why-amazon-has-no-profits-and-why-it-works/ https://a16z.com/2014/09/05/why-amazon-has-no-profits-and-wh...

sol_remmy 9y ago

Your saying they should employ a "few thousand workers" unnecessarily from January - October for moral reasons I wonder if you would still act so idealistically if you held stock in the company..

mikeyouse 9y ago
I wasn't saying they should employ them for moral reasons, I was saying that they absolutely could afford to do so. Side note; I do hold stock in the company, and because I'm not an asshole, I do think they should rely less on temp labor and they should improve working conditions for their existing warehouse workers. Even if it reduces my capital gains by some fraction of a percent.