Think Robots Will Inevitably Take Your Job? Amazon Proves Otherwise
Oct 5th 2013 9:18AM
Updated Oct 5th 2013 9:20AM
Have you ever worried about the possibility of today's increasingly capable robots eventually devastating our job market?
It might be time to reconsider that train of thought.
Earlier this week, Amazon announced it'll hire 70,000 temporary employees for the upcoming holiday season, or a 40% increase over last year's seasonal hiring. Better yet, Amazon says, it expects thousands of those temps to be able to secure permanent, full-time positions going forward.
And that's on top off the more than 7,000 temporary employees Amazon has converted to full-time status so far in 2013, including the more than 5,000 full-time jobs for which they began hiring at the end of July.
Here's why it's important
So, what's all this have to do with robotics?
Of course, an actual human is still required to pick the items out the respective bins even with the Kiva robots doing their thing, but Kiva's solution is exceptionally effective in that it takes much of the load off of exhausted workers. In fact, prior to the acquisition, some of those workers used to complain of walking more than 15 miles per day, and now are no longer required to physically locate everything Amazon's millions of retail customers order.
Still, many people worried at the time Amazon's increased efficiency would ultimately translate to fewer warehouse jobs for the ever growing ranks of work-starved citizens.
But instead of cutting jobs to boost profitability, Amazon has consistently used its fanatical quest for improved efficiency to both lower the prices of its goods and reinvest in growing its infrastructure.
This, in turn, translates to higher sales -- remember second quarter revenue increased 22% to $15.7 billion -- and, most pertinent to this conversation, a larger number of employees required to fulfill those orders.
But wait, you say, how are Amazon's low prices affecting other retailers? Couldn't it be that the net effect of Amazon's efficiency gains are achieved to the detriment of jobs from its brick-and-mortar competitors?
After all, Target decreased its own seasonal hiring by 20% this year to 70,000 part-time employees on the heels of anemic sales growth last quarter, which eventually resulted in the company lowering its full-year 2013 guidance a little over two weeks ago.
But remember, Target's operations are currently exclusive to the U.S. and Canada, so they are tied specifically to the strength of cash-strapped North American consumers. Amazon, by contrast, received nearly 40% of its revenue outside of North America last quarter.
Global retail stalwart Wal-Mart seems a better direct comparison from a hiring perspective. What's more, Wal-Mart even remained firmly in the same boat as Target last quarter as it also missed sales estimates while at the same time reducing full-year expectations.
But the world's largest retailer also announced just last week it is increasing its number of part time hires this holiday season by 10% to 55,000, which calls into question the argument that Amazon could be cannibalizing jobs from its closest retail competitors.
In the end, it's evident as companies like Amazon continue to grow more efficient -- even through the use of robotics, which intuitively seems to negate the need for more human jobs -- they aren't necessarily seizing the opportunity to cut employment in the name of boosting short-term profitability.
Instead, and to its benefit over the long term, Amazon is intelligently focusing on growing its business in a number of other ways.
First, noting CEO Jeff Bezos' oft-repeated mantra, "Your margin is my opportunity," the folks at Amazon have made no secret of the fact they love to further reduce their already low prices and pass those savings onto consumers.
Second, and as a positive consequence of the resulting increased demand, Amazon is then able to happily create new jobs for an even larger number of people going forward.
We'll always have a place in our own world
Sure, the Kiva robotic system is a limited example in which humans are still required, and there certainly exist other types of robots that can now complete entire workflows with minimal human involvement.
But as the old saying goes, "Necessity is the mother of invention."
To be sure, our roles might change as the field of robotics continues to advance, but no matter how much we find ways to autonomously streamline our work, it seems a safe bet we'll always be able to invent new, better ways to keep people employed.
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The article Think Robots Will Inevitably Take Your Job? Amazon Proves Otherwise originally appeared on Fool.com.Fool contributor Steve Symington has no position in any stocks mentioned. The Motley Fool recommends Amazon.com. The Motley Fool owns shares of Amazon.com. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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