3 June 2020

Tech Nations · United States of Amazon


At war
Amazon in the pandemic


How Jeff Bezos steadied his empire when Covid-19 hit – and whether he paid enough attention to employee safety – will be a defining moment for the billionaire and his Everything Store

By Alexi Mostrous

“When something bad happens you have three choices,” Theodor Seuss Geisel, the children’s author most commonly known as Dr Seuss, wrote. “You can either let it define you, let it destroy you, or you can let it strengthen you.”

In his letter to shareholders in April, Jeff Bezos used the quote to demonstrate his commitment to steering Amazon through the coronavirus pandemic, describing Covid-19 as “the hardest time we’ve ever faced”.

Telling shareholders to “take a seat”, the 56-year-old announced more than 150 process changes to Amazon’s operations network, including freezing all non-essential goods in its warehouses, ordering millions of face masks and implementing temperature checks at sites around the world. Some 175,000 additional employees were to be hired to cope with the surge in demand, he said.

Such measures will cost Amazon around $4 billion. The cost of Covid-19 could wipe out the retailer’s profits entirely for the second quarter, notwithstanding record-breaking sales in January, February and March. Despite this huge outlay, Wall Street seemed satisfied with Bezos’s response: Amazon’s share price is currently almost at an all-time high and its founder’s personal wealth has swelled from $123 billion before the pandemic to around $143 billion today.

For a few weeks, however, Covid-19 shook the very foundations on which the Amazon nation was built. How Bezos steadied his listing empire – and whether he paid enough attention to employee safety in the process could mark a defining moment for the billionaire and his Everything Store.

Welcome to our third instalment of our investigation into Amazon as a tech nation, a series that treats the world’s biggest technology companies as countries – not corporates. In part 1 we examined its leadership, in part 2 we investigated its economy. Today, we’re focusing on how the United States of Amazon is behaving during a time of war.

If you asked anyone about Amazon before Covid-19, they would likely tell you how happy they were with its product selection, its prices and particularly how smoothly its logistics and delivery systems delivered almost any item in the world to their doorsteps in 24 hours or less.

Yet as coronavirus swept across America in February and March, that famous fluency broke down.

At various points, the site simply ran out of many brands of toilet paper and bottled water. Amazon’s website had 639,330,722 visits for the week of 9 March, according to data from Comscore, up a third from the year before. Deliveries for many items were suddenly being measured in weeks, rather than days.

The top 10 keyword searches on Amazon.com in March changed from the usual “iphone 11 cases” and “airpod” to terms exclusively relating to health and sanitation, according to GrowByData, a tracking tool. Meanwhile, a Wall Street Journal report claimed that Amazon had been reduced to persuading its customers to shop less, removing recommendation widgets that showed them what other people with similar items in their basket also bought.

Adding to the chaos, third-party sellers jacked up the cost of many products, sometimes evading Amazon’s anti-price gouging software by selling items such as masks for $1 but charging $40 for shipping.

The constitutional pillars of the United States of Amazon – low price and fast delivery – were no longer guaranteed.

In response, the Amazon removed 3,900 abusive accounts – but it couldn’t prevent the abuse entirely. A report by the United States Public Interest Research Group Education Fund, a nonprofit organisation, found that high prices on many items during February were double the average of the previous 90 days.

Controversially, the study found that price gouging was not limited to third-party sellers. About one in six of the products which saw prices jump by 50 per cent were sold directly by Amazon, the research group said.

Screenshots we’ve seen appear to show how on 15 March Amazon sold two rolls of kitchen roll for $72.43 (equating to around 20 cents a sheet). Experts said such price hikes were more likely the result of a malfunctioning algorithm than corporate profiteering – but the end effect for the consumer would have been the same.

In April, a group of shoppers brought a lawsuit against Amazon alleging the company participated in price-gouging. Their lawyers produced evidence that prices of face masks, pain relievers, cold remedies, black beans, flour and disinfectants all increased by 100 per cent.

“Amazon’s position as a vital seller in times of contagion does not place it above the law,” lawyers for Mary McQueen and Victoria Ballinger, two Amazon shoppers, wrote. “If anything, the increased demand for its platform makes price gouging by Amazon all the more unconscionable.” (The company denies the claim).

In recent weeks, Amazon appears to be getting back to normal. Non-essential goods are being allowed into the warehouses. Prime delivery is back to two days or less. The ship of state, at least financially, appears to have righted itself.

The question is: at what cost?

Interviews with multiple employees, combined with reviews of lawsuits filed against Amazon and messages posted on private social media groups, detail multiple complaints relating to how the company acted during the Covid-19 crisis.

These include that Amazon or its managers failed to implement safety procedures soon enough; disregarded or even retaliated against those raising safety concerns; continued to ship non-essential goods despite promises to focus only on essentials and told employees not to wear masks because they could cause panic.

Attorneys-general from 13 states – including New York and Amazon’s home state of Washington – have ordered Bezos to provide a full breakdown of workers who have tested positive for the virus. Amazon has so far refused to release such a figure publicly, insisting it is “not a particularly useful number”.

Protesters outside an Amazon fulfillment center in Staten Island

An unofficial tally of sick workers at the company’s US warehouses compiled by three female Amazon workers puts the number at between 1,040 and 1,300. Eight Amazon employees are confirmed to have died from Covid-19.

It is unknown how this figure compares to staff at other retailers, but Amazon has said that its overall infection and quarantine rates are “at or below the rates of the communities where we operate”.

Jana Jumpp, one of the employees who created the list, accused the company of obscuring the total number of Covid cases and not counting coronavirus infections among any workers at its warehouses employed by third parties.

“After about the fifth case they’ll just tell us ‘we have additional cases’,” she told us. “They won’t tell us specific numbers because we believe they’re trying to conceal the scale of the problem.”

Amazon told us that it was taking “proactive measures to protect employees and associates who have been in contact with anyone who has been diagnosed or becomes ill”. These include contacting every person at a warehouse site anytime there was a confirmed diagnosis.

It said it was investing around $4 billion between April and June on Covid-related initiatives including more than $800 million on Covid-19 related safety measures, such as purchasing 100 million masks, 34 million gloves and 1,115 thermal cameras to monitor employees for high temperatures. At Amazon warehouses, “social distancing ambassadors” are tasked with ensuring that employees stay an appropriate distance apart.

Enesha Yurchak, a Oregan-based paramedic, worked at Amazon as a medical responder before she was fired in April. “The company retaliated because I started raising safety concerns for myself and for Amazon employees,” she told us.

An Amazon worker delivering in the Bronx borough of New York, during lockdown

Yurchak, who has not spoken publicly before about her legal battle with Amazon, described how her manager allegedly shouted at co-workers in mid-March for wearing masks – now a requirement in every Amazon warehouse.

“My co-worker was concerned about her lungs: she had a medical history,” she said. “She decided to bring her own masks to protect herself and my manager yelled at her in public that she needed to take it off because she’s scaring people. She had to take it off.”

Yurchak also alleges her manager instructed employees not to hand out a shipment of thousands of masks which arrived for them in April “and that their arrival be kept quiet”.

After she developed symptoms of coronavirus, Yurchak was advised to take two weeks off. While off work, she says, Amazon managers pressured her to come back early and made her feel guilty for taking time off.

When she returned, the atmosphere became “extremely uncomfortable”. She claims she was instructed to treat injured Amazon workers from a distance and on the warehouse floor, rather than in a private office. Her concerns over potential privacy violations – as well as other safety-related complaints – were allegedly dismissed.

A day after returning to work on April 15, Amazon terminated Yurchak’s employment for “insubordination”. She had no prior disciplinary action and had previously been commended for her “wealth of knowledge” and her “amazing blend of personality and technical acumen”. Amazon declined to respond to Yurchak’s particular allegations.

Private members groups on Facebook set up by Amazon employees buzz with complaints similar to Yurchak’s. Several said that the number of new Covid cases at their facilities had increased since the beginning of May, when Amazon cancelled its temporary policy of allowing them unlimited unpaid time off. “We had no cases and now it’s blowing up,” one employee wrote. “We didn’t have any cases until UPT was taken away,” another said. “People don’t want the points so they come in sick.”

Others complained about how insensitively Amazon was enforcing lockdown protections. Brittany Charsha said she and her fiancé, who lived together and both worked at Amazon, were given a final warning for walking next to each other. “Give me a break,” she wrote on one private group.

Amazon workers in California leave a warehouse to protest against what they say are unsafe working conditions

Andre Goodin works as a “water spider” at an Amazon facility in Maryland. Water spiders walk up and down the packing “wall” getting packers supplies of boxes, tape and other materials. In April, Goodin’s fellow water spider, a man called Mike, tested positive for Covid-19 yet, according to him, Amazon has failed to contact anyone to warn them they had come into contact with someone infected.

“As water spiders we’ve been in contact with almost every associate,” Goodin told me. “As of now they have yet to call or inform me that I may have been exposed, even though I know for a fact I have been. I even went to HR to notify them and they sent me back to work.”

 

The idea that Amazon sees employees as “fungible” – or disposable – is a long-running criticism. Algorithms eliminate any slack out of the system, giving warehouse workers little opportunity to rest or recover. As the company’s popularity has grown, so has the pressure on fulfilment centre workers, several told me.

“Ibuprofen is your best friend,” one worker wrote on a social media group discussing how many painkillers and energy drinks to consume before working (Amazon provides painkillers such as Tylenol and Advil free to staff). Dozens of other workers discussed which comfortable shoes could best ameliorate back and knee pain during their 10-hour shifts.

In the UK, the GMB Union demanded a parliamentary inquiry this year after discovering that 600 serious accidents or near misses had been logged at Amazon’s UK warehouses in the last three years. The incidents, reported to the Health and Safety Executive, included complaints that Dundee staff were forced to work in freezing conditions and that Amazon had “created an environment of fear to speak out in matters that risk lives”. Amazon says it averages 43 per cent fewer injuries than other transportation and warehousing companies in the UK.

Jack Dromey, MP for Birmingham Erdington, where the company’s Rugeley depot is based, accused Amazon of behaving more “like a 19th century mill owner” than a 21st century company.

A 'picker' collects items inside an Amazon.co.uk fulfillment centre in Hemel Hempstead, north of London

For Amazon, a British MP’s criticism is something to be shaken off with a few lines from the press office. The company found it altogether harder to counter the resignation of one of its most senior staffers, who quit last month in protest of the treatment of his coworkers.

In part 1 of this series, we published an interview with Tim Bray, one of only a few “distinguished engineers” at Amazon, who quit last month after accusing it of firing warehouse whistleblowers on flimsy pretexts. Bray told us that Amazon’s success was built on its “disempowered workforce”.

“At some point, the cost has to be counted,” he said.

Bray’s departure signalled a new moment in Amazon’s crisis: no senior executive at the company had ever done anything like it. A few days later, Anton Okmyanskiy, a principal engineer in the AWS division in Vancouver, said in a LinkedIn post that Bray’s critique “struck a chord”.

“Amazon is the shining beacon of productivity and consumer benefits it can deliver,” he wrote. “But capitalism is also about effective use of resources including human ones and has no checks and balances against runaway power imbalances. We need to self impose them on ourselves. It is time!”

Will the pandemic mark a turning point in how Amazon treats its employees, now elevated in the public mindset to the status of essential workers?

“Covid-19 has demonstrated the limits of a workplace that continuously pushes workers to the point of harm in the name of efficiency,” Casey Newton, the influential technology commentator, wrote. “Tech giants can’t stay ahead of their competition without a brilliant, motivated, workforce – and [these] people tend to be highly sensitive to the treatment of their co-workers.”

For Chris Smalls, one of the Amazon employees that Bray referred to, Amazon was a decent place to work before they turned against him over Covid-19.

“You have full medical benefits and good perks, and the pay is pretty decent,” he said. “I always used to tell people to come and apply.”

It was only when Covid-19 hit that Amazon “dropped the ball”, Smalls told us. “It was business as usual until mid-March. Then I noticed people getting sick. Employees I oversaw, my colleagues, my managers above me. People were vomiting at their work stations.”

Like Yurchak, the paramedic in Seattle, Smalls says Amazon did not move fast enough to implement safety measures in March, even as it was telling the public that it was limiting sales to essential goods only.

“We don’t want to tell employees because we don’t want to cause panic,” Smalls says he was told, after raising concerns. Unsatisfied with Amazon’s response, he went home and began to organise protests against the firm. Amazon fired Smalls at the end of March, alleging that when he returned to the warehouse he breached social distancing guidelines (an accusation he denies).

Chris Smalls, a fired Amazon fulfillment center employee, centre, speaks during a protest outside an Amazon.com facility in Staten Island

You don’t have to look very far to find serious allegations made against Amazon by its employees – whether Covid-19 related or not.

Lavinia Isaacs, a Georgia-based Amazon worker, told a private Facebook group last month that she was pregnant and that her doctor had advised her not to lift anything heavier than 10lb.

When she told Amazon, she alleges, her managers gave her two choices: they could find her a less strenuous job, but it could take two weeks, during which time she would be unpaid. Or she could continue to work but would have to “sign a paper saying I had to be able to lift 45lb and go high in the air” (Amazon pickers operate machines which lift them skywards. Pregnant women are not allowed to operate them).

Isaacs chose to go home – unpaid – to protect the health of her unborn child. When we contacted her she had been home for more than two weeks. Amazon had still not got in touch. “I’m still out of work with no pay until they make a decision,” she said.

Lawmakers may soon be able to put some of these accusations to Bezos – or at least to one of his top lieutenants. New York’s attorney general, Letitia James, wrote to Amazon on 22 April, saying its treatment of Chris Smalls, one of the fired workers, “raises concerns that Amazon’s health and safety measures taken in response to the Covid-19 pandemic are so inadequate that they may violate several provisions of the Occupational Safety and Health Act”.

In a statement, Amazon told us that its “top concern” was the health and safety of its employees. It is working on building a huge testing regime for coronavirus and is – unlike many in America or Europe – a company taking on workers rather than firing them. It highlighted how it had distributed millions of items of PPE, including masks, gloves, hand sanitizer, and spray and wipes.

There are still signs, however, that such protections remain unevenly distributed. Last week Jana Jumpp logged on to her dedicated Facebook channel and posted a picture of a vending machine installed to dispense protective gloves at a warehouse in Indiana. It was empty.

Credits

Reporter: Alexi Mostrous

Editors: Basia Cummings and James Harding

Graphics and design: Chris Newell

Additional reporting: Imy Harper and Ella Hollowood

Photography: Jon Jones

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