Page 10 - Issue 50

The challenges of “Balancing" Labor, Unions,

and Profitability : Meeting Amazon CEO

Andy Jassy

Hana Ahmed Bishr- 3rd Level- Economics

hana.beshr2020@feps.edu.eg

At the annual conference of Dealbook Summit’22 held in to provide them with a great customer experience and that
NYC, Andy Jassy who got the job of Amazon CEO in the has always been something that Amazon has focused very
middle of the pandemic, discuss the effect of an uncertain squarely on. This year, the leaders of Amazon had the lens
economy on investments and profitability, he also shed of a very uncertain economic environment as well as having
light on the problems of the Labor unions and the layoff hired very aggressively over the last several years, the right
occurred by Amazon. The company was in super growth decision needed was to streamline their cause and their goal
mode and trying to build out to deal with all the by streamlining cut costs but at the same time without
consumers out there. The stock was through the roof and compromising on the key strategic long-term best change so
people probably didn’t anticipate it. In 2020, Amazon’s they examine a lot of operating plans and they realized that
retail business grew 39 % year over year and 245 billion some of their cost structure, by considering different
dollars in annual run rate which is unprecedented, and it sensitivities, was not as they expected to be so they started to
forced Amazon to spend a lot more money and to go pause incremental hiring as well as being slimmer on some
much faster in building infrastructure than ever imagined. of their resources.
That decision was made even though the uncertainty of Amazon has been confronting challenges concerning the
overbuilding because it took two years to build fulfillment labor issue and the battle of workers’ unions. Amazon
centers at that time. It was hard for Amazon to imagine workers at a warehouse in Albany voted no on a union while
what 2021 was going to be like because it looked like the the workers in Staten Island voted yes. As the state of this
economic agents were coming out of the pandemic but dynamic, Andy Jassy state that labor unions aren’t favorable
then Omicron happened and the war in Ukraine happened, for Amazon because they were more bureaucratic, slow, and
and then the inflationary environment happened and now limited agility which is fairly non-controversial and
all agents must deal with this very uncertain economy. straightforward but for Andy Jassy, the truth is that Amazon
Amazon has found over time that consumers are very employees are better off without union for a few reasons one
careful about whom they choose to partner with, they go is that Amazon aims to Empower their employees, if they
with people and companies that are going find ways that they can make the experience better for
customers or their fellow