Amazon announces major move towards automation at its US warehouses
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Amazon announces major move towards automation at its US warehouses

Ecommerce giant Amazon made a shock announcement yesterday: it’s automating a significant number of box-packers in its US-based warehouses. Why the shock? Although automation has long been assumed to be “just around the corner” there has been no forewarning from the company that the move was imminent… workers, in fact, might have thought their luck was improving, as Amazon recently committed to paying a vastly improved minimum wage after years of complaints. Staff can take some solace in the fact that the company says jobs will be created elsewhere and retraining given for more technical roles.

According to anonymous sources said to have worked on the program, Reuters reported that Amazon has been testing the technology in question – machines that can pack up customer orders far faster and more efficiently than humans – for the last couple of years. These people say that Amazon “has considered” removing “at least” 24 roles in each of its 55 US fulfilment centres. That amounts to more than 1,300 jobs across the country.

Amazon’s share price has appreciated by 28% so far this year

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Source: Yahoo Finance

Amazon has opened warehouses around the US at an incredible pace recently, as it looks to make deliveries faster for its Prime members. As a result, it’s become a major employer, and the jobs that it’s now looking to automate have won it both public support and government subsidies. However, they still represent a cost that is becoming unnecessary – as Amazon’s international peers (JD.com) and domestic competitors (Walmart) embrace the automation of warehouses, Amazon needs to embrace modern cost-cutting solutions too.

Amazon says that it expects to recoup its initial investment in boxing machines (which come in at $1 million each) within a 2-year period. Each machine vastly outpaces people, packing between 600 – 700 boxes per hour (that’s a four- to five-fold increase over human labour).

In a statement, an Amazon spokeswoman said: “We are piloting this new technology with the goal of increasing safety, speeding up delivery times and adding efficiency across our network. We expect the efficiency savings will be re-invested in new services for customers, where new jobs will continue to be created.”

Disclosure

Dominion holds Amazon in its Global Trends Ecommerce Fund.


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