When Amazon (AMZN) revealed last week that CEO Jeff Bezos would step down later this year, the news broke in an earnings report that announced a quarterly sales record — but it also coincided with less flattering news.
On the same day, Amazon agreed to pay $61.7 million in a settlement over claims that it withheld drivers' tips; six days later, workers at a warehouse in Bessemer, Alabama, would begin casting their votes in a historic effort to form the first union at one of the nation’s largest employers.
Incoming CEO Andy Jassy, currently the chief executive of Amazon Web Services (AWS), will take over a company bolstered by rapid growth amid the pandemic but faced with increasing backlash from Congress and its own workforce. The fight over conditions at the company’s vast warehouse network will test whether he intends to continue the approach carried out by Bezos or change course in response to the political environment.
Four current or former Amazon employees — all of whom have previously criticized the company’s treatment of warehouse workers — told Yahoo Finance they don’t expect Jassy to improve conditions at the facilities. Jassy’s business-minded management history and long career at the company make a pivot all but impossible, they say. But they warn that newly empowered workers and their allies in Washington D.C. may give him no choice.
“Andy Jassy — he’s no new guy. I don’t see any change,” says Derrick Palmer, 32, who has worked at the company’s Staten Island warehouse since 2018. “It will continue to get worse for Amazon, unless they react.”
Amazon did not respond to a request for comment about warehouse management under Jassy. But the company strongly rebuked claims that it has neglected the health of its workers, and defended its opposition to union organizing among employees in Alabama.
“Nothing’s more important than the health and safety of our employees, and we’re doing everything we can to support them through the pandemic,” Amazon Spokesperson Maria Boschetti said in a statement. “In 2020, we invested $11.5 billion in safety measures and equipment in our buildings, including masks, temperature screening, plexiglas shields, sanitizing products, additional cleaning teams, and even an on-site testing program.”
“The fact is that Amazon already offers what unions are requesting for employees: industry-leading pay, comprehensive benefits from the first day on the job, opportunities for career growth, all while working in a safe, modern work environment,” Boschetti adds. “At Amazon, these benefits and opportunities come with the job, as does the ability to communicate directly with the leadership of the company.”
But current and former employees tell a different story about the company’s treatment of workers and posture toward labor organizing.
Michael Foster of the Retail, Wholesale and Department Store Union holds a sign outside an Amazon facility where labor is trying to organize workers on Tuesday, Feb. 9, 2021. (AP Photo/Jay Reeves) ·ASSOCIATED PRESS
‘A Business Guy’
The responsibilities held by Jassy, 53, over his more than 20 years at Amazon have remained distant from the company’s warehouses. When he joined Amazon in the late 1990s, soon after graduating from business school at Harvard University, Jassy worked as a marketing manager. But he quickly shifted to the cloud-computing department, leading the division since its launch almost two decades ago.
For much of his tenure, Jassy has sustained a close working relationship with Bezos. In 2002, Jassy closely shadowed Bezos as part of a training program for promising young executives, The New York Times reported.
Tim Bray, a former vice president and engineer who worked on Amazon Web Services for more than five years until he resigned in protest last May, says he stood two or three reports down the organizational chart from Jassy and met with him in groups roughly a dozen times. In some of the meetings, Jassy gave feedback to Bray and a team of engineers on project proposals, Bray says.
Bray described Jassy as “very precise and detail-oriented,” recounting a project that he and coworkers brought to Jassy at least three times. On the third try, Jassy said he approved the proposal but needed to understand how to describe it to a business-focused Chief Information Officer, or CIO, Bray recalled.
“He said, ‘This is a great idea; sure, we can do this. But this document doesn’t say how I can explain this to a CIO. If I can’t describe it to a CIO — why to use this — it’s no good,’” Bray says of Jassy. “He was a business guy.”
Under Jassy’s supervision, AWS became the most profitable division at the company. An earnings report last week showed that cloud-computing accounted for 10% of the company’s revenue but 52% of its operating income. Metrics-oriented evaluation drove the workplace culture at AWS, Bray said, just as it does across the company.
“From the point of view of Amazon owners and leadership, the Amazon culture is working great,” Bray says. “It’s arguably the world’s most powerful company.”
Immigrant and labor activists participate in a rally outside of a Amazon distribution center on December 16, 2019 in the Queens borough of New York City. (Photo by Stephanie Keith/Getty Images) ·Getty Images
‘Nothing changed’
Over much of the nearly three decades since Bezos founded Amazon, the company has withstood persistent criticism over the conditions at its warehouse network, which has grown to at least 110 fulfillment centers in North America. In recent years, criticism of the working conditions focused on demanding quotas and digital surveillance that employees say penalized them for taking breaks.
“It's just a huge, huge problem where you can go to work for a company as rich as Amazon and not know whether or not you can keep up with the working conditions or how are they going to try to squeeze you this week, how many miles you're gonna walk in a day,” Rutgers University School of Management and Labor Relations professor William Brucher told Yahoo Finance.
In 2018, outcry over the company’s warehouse conditions reached a fever pitch, including months of public attacks from Senator Bernie Sanders (I-VT). The company instituted a $15 wage floor in October of that year, and last month backed legislation that would gradually raise the federal minimum wage to $15 per hour.
The novel coronavirus has fueled record e-commerce revenue for the company as hundreds of millions of Americans have been forced into their homes, prompting the hiring of hundreds of thousands of workers and plans to expand its warehouse network. But it has also elicited a new set of grievances around health risks and inadequate compensation tied to the pandemic. By last October, 19,816 employees had tested positive or been presumed positive for COVID-19, Amazon said that month.
Current and former Amazon warehouse workers and labor relations experts voiced skepticism about the likelihood that Jassy will bring a different approach to the company’s treatment of employees, either with regard to the demanding performance standards or continued coronavirus exposure concerns.
Chris Smalls, an Amazon warehouse worker who was fired last March, the same day he participated in a walkout, told Yahoo Finance Live that he “felt a moral victory” when he heard that Bezos will step down. (Amazon says it terminated Smalls for violating social distancing guidelines.)
“But systemically and fundamentally, nothing changed,” Smalls adds, noting that Bezos will remain at the company as executive chair. “Being in an executive position, he still holds all the power there. He's still going to be in the decision-making room.”
William Stolz, who works at an Amazon warehouse in Shakopee, Minnesota, said the company’s focus on performance metrics will likely preclude any potential changes under Jassy.
“A lot of the time it seems like we’re working for a computer,” Stolz told Yahoo Finance Live on Feb. 3, the day after the company announced Bezos would step down. It’s “all tracked through this computer system, and that’s ultimately what they use to hold us accountable.”
Peter Berg, professor and director of Michigan State University’s School of Human Resources and Labor Relations, expressed similar skepticism. However, he added, there’s still hope that Jassy could improve relations between Amazon and its workers.
“It creates an opportunity for him to make a shift to make a decision if he wants to be more strategic,” Berg said. “Maybe it's time to make a change, and make a shift that could be both political for the company and beneficial for the workforce, particularly in warehouses.”
‘Could be the beginning of a movement’
Soon after the outset of the pandemic, in March, workers at a Staten Island warehouse held an initial protest over coronavirus exposure fears. In the ensuing months, the demonstrations grew to hundreds of workers spread across 50 warehouses nationwide. The worker organizing has culminated in the union vote now underway at a facility in Bessemer, Alabama, where 85% of the workers are Black, according to a union estimate.
Amazon has aggressively opposed the union drive, hiring the same law firm — Morgan Lewis — that it did when it fought a union drive at a Delaware warehouse in 2014. Plus, the company created a website that warns of onerous dues payments and the negative impact of a union on day-to-day operations.
The company is abiding by all NLRB rules and guidelines as it relates to union campaigns, and believes it is important for all employees to understand all sides of the union election, Amazon said.
AWS CEO Andy Jassy, discusses a new initiative with the NFL that will transform player health and safety using cloud computing during AWS re:Invent 2019 on Thursday, Dec. 5, 2019 in Las Vegas. (Isaac Brekken/AP Images for NFL) ·ASSOCIATED PRESS
“This could be the beginning of a big movement,” says Palmer, the worker at a facility in Staten Island, who participated in a demonstration last March. “We had a movement with us on March 30 that inspired other workers to protest; now we have a group of Black workers in Alabama who took the proper steps to create a union.”
“Now they have the opportunity to make history,” Palmer adds.
The Retail Wholesale Department Store Union, or RWDSU, the union organizing workers at the warehouse in Alabama, has been in contact with the White House about the effort, Reuters reported earlier this month.
“We have a new administration in Washington that has a completely different attitude towards the importance of unions,” RWDSU President Stuart Appelbaum told Yahoo Finance Live last week. “So it seemed like the right time and the right place to hold an election on unionization.”
Bray, the former AWS engineer, says the strengthened opposition to Amazon may ultimately determine whether Jassy’s leadership on the issue differs from Bezos. In addition to the fight over worker rights, a broader backlash over issues like antitrust and content moderation has befallen big tech, which benefited during the pandemic while other industries suffered.
“The single most significant change in landscape between the Bezos era and the Jassy era will be political and societal,” Bray says. “We’ve had a techlash.”
Still, according to Paul Clark, professor and director of the School of Labor and Employment Relations at Penn State University, Amazon will do everything it can to put down additional organizing efforts across the company.
“Their focus seems to only be maximizing profits. And they believe that unions drive up labor costs and reduce profits, and that the union gets in the way of them making the unilateral decisions they want to make to make their company as profitable as it can be,” Clark told Yahoo Finance.
“So it's virtually gospel in terms of the philosophy of business today that if you don't have a union, do everything you can to keep the union out. And if you do have a union, you do what you can to get rid of it.”
The fate of the union drive in Alabama will be sealed on March 29, when mail-in voting concludes.
Max Zahn is a reporter for Yahoo Finance — find him on Twitter at @MaxZahn_. Dan Howley is the tech editor at Yahoo Finance — follow him on Twitter at @DanielHowley.
