Replacing human workers with robots to save billions of dollars

Since 2018, the number of Amazon employees in the US has more than tripled to almost 1.2 million. Nevertheless, managers have reportedly informed the board last year that the company will not need to hire any more US employees in the future thanks to advancements in robot automation—even if sales double by 2033.

According to internal documents, around 160,000 jobs could be lost by 2027, particularly in logistics and warehousing. In the long term, Amazon plans to automate around 75 percent of all activities by 2033, which will save the company up to $12.6 billion (and according to projections, this will reduce the cost to sell each product by about 30 cents).

Amazon already employs more than 1 million robots that support 1.6 million human workers. In the future, however, machines will no longer just help but completely take over many tasks—even beyond the warehouse. Amazon is already working on robots for package delivery.

According to the New York Times, Amazon is preemptively dodging criticism by molding its communication. Terms like “automation” and “artificial intelligence” are to be avoided in public. Instead, the company wants to talk about “advanced technology” or “cobots” (i.e., robots that work together with humans). Amazon is also planning to increase involvement in charitable projects to soften negative headlines.

Amazon rejects the implications

Amazon spokesperson Kelly Nantel told The Verge that the documents came from an internal team and do not reflect the company’s overall strategy. Many internal papers are drafts or brainstorms that do not reflect the current state or long-term planning, she says.

At the same time, Amazon points out that it’s actively recruiting staff, with about 250,000 new jobs to be created over the Christmas period. The company didn’t say how many of these jobs will be permanent.

Amazon also told the NYT that its managers haven’t been instructed to avoid using certain terms in connection with robotics, and that its involvement in charity and the community has nothing to do with the company’s automation plans.

The impact of Amazon’s robot strategy

Amazon has relied on robot technology for years. Back in 2012, the company bought robotics manufacturer Kiva Systems for $775 million. Since then, the company has been massively driving forward the automation of its warehouses and delivery processes. Thousands of robots are already being used in newer logistics centers such as in Shreveport, Louisiana. According to internal calculations, Amazon was able to reduce the number of employees there by a quarter in the first year, while at the same time increasing throughput.

However, Amazon emphasizes that increasing automation will also create new job profiles, for example in the areas of maintenance, programming, and monitoring of robotic systems.

For consumers, Amazon’s increasing use of robots is unlikely to be noticeable in the short term. Packages may even arrive faster. In the long term, however, the trend could have an impact on the labor market in the US—and possibly also on prices, service quality, and the treatment of employees in online retail in general.

Economist and Nobel Prize winner Daron Acemoglu warns of the possible consequences: should Amazon realize its plans, the company “will become a net job destroyer, not a net job creator.” There is also a risk that other companies will follow suit if full automation proves to be financially profitable for Amazon.