How 1 Million Robots Are Taking Over Amazon Warehouses

19m
Amazon warehouses are more automated than ever. The company, a key bellwether for the U.S. labor market, now has over a million robots packing and shipping goods in its fulfillment centers. While some employees are finding ways to transition into higher-paying technical roles that manage the robots, the company’s CEO Andy Jassy has said it plans to cut the size of its overall workforce. Sebastian Herrera explains Amazon’s vision for the warehouse of the future. Jessica Mendoza hosts.

Further Listening:

- AI Is Coming for Entry-Level Jobs.

- The Battle to Be the King of Retail: Walmart vs. Amazon

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Transcript

When you step inside Amazon's warehouse in Shreveport, Louisiana, it looks pretty normal at first.

You have your offices, you have people walking around, you have security.

But as you get up to floor two to five, you really start to hear the buzz of machinery.

If you can imagine the noises of the ju, zhu, zhu, jzhu.

Right?

Those sort of noises.

That's our colleague Sebastian Herrera describing Amazon's next generation fulfillment center.

The Shreveport complex is five stories high.

Inside, robots zip across the floor like giant pucks.

And robotic arms lift, sort, and pack with eerie precision.

There's a lot of whirring, a lot of metallic clangs.

There are different different wheel droids that are in the facility.

Wild, you said the word droids, and I immediately was like, as in Star Wars, like beep, beep, beep, they're like buzzing around.

That's literally happening at this warehouse of the future.

Here, robots do most of the work.

And that's the direction Amazon, the second largest private employer in the U.S., is headed towards.

In fact, just recently, the company reached a major milestone.

They just crossed the 1 million robot line at their facilities.

And that's really significant because Amazon has reached a turning point with robotics where soon they will have more robots than they do humans.

Oh my gosh.

Amazon is really a bellwether for the U.S.

labor economy.

So when it makes any sort of move inside of its facilities, People are watching, companies are watching,

and it could transform the way that companies and people think about the labor force writ large.

Welcome to The Journal, our show about money, business, and power.

I'm Jessica Mendoza.

It's Thursday, July 17th.

Coming up on the show: One Million Robots: How Amazon is Transforming American Labor.

This episode is brought to you by AARP.

They have reskilling courses and career tools to help your income live as long as you do.

The younger you are, the more you need AARP.

Learn more at AARP.org slash skills.

For years, Amazon has been the heartbeat of local hiring in places all over America.

In business news tonight, Amazon is going on a hiring spree.

Thousands of job seekers lined up at warehouses yesterday.

Just take a look at the giant sign they've posted on a tractor trailer outside their center in Kenosha.

The company would hold nationwide job fairs, and billboards would advertise for warehouse openings.

When a new fulfillment center opened, the whole town would hear about it.

You can visit both big city and small town, and it's not unlikely that Amazon is the largest employer there or one of the largest employees there because they've long had thousands, hundreds of thousands of workers in these facilities.

But human workers have their limits.

Amazon's warehouse employees would walk miles every day, often lifting heavy boxes to get inventory.

Over time, the e-commerce giant that pioneered two-day delivery looked for ways to make that process more efficient, to move products even faster.

And by 2012, Amazon had its answer.

Amazon agreeing to buy Kiva Systems Inc.

for $775 million in cash, Kiva developed by a robot company.

This is like the Jetsons.

Yeah, it's so cool.

The technology will help it.

Those first Amazon robots from Kiva Systems look like big orange Roombas on steroids.

They glide along a grid and ferry goods and warehouses, warehouses that might be as big as 23 football fields.

Those droids were able to cut down the time to fulfill a shipping request from more than an hour to just just 15 minutes.

These robots are able to pick up shelves and move them in no time, and they can do it with multiple shelves.

And so that was able to allow Amazon to move products across their facilities much faster than before.

By 2017, Amazon had scaled up its fleet of droids to 100,000 units.

Amazon's robotics team touted their military precision.

Like a marching army of ants that can constantly change its goals based on the situation at hand, right?

So our robotics are very adaptive and reactive in order to.

While Amazon was building its robot fleet, its human employees were also busy.

Some of them were raising concerns about working conditions on the warehouse floor and talking about forming a union.

And it's exactly why we must stand with workers everywhere.

I'm taking a stance against the company.

Amazon filed objections to the unionization effort, but the organizers did succeed at one warehouse in New York.

To the first union in American history.

As Amazon's human workers called for better labor conditions, its droids, which didn't have overtime demands or health insurance needs, kept humming.

Robots don't feel, don't hurt in the same way that humans do.

But also, you know, robots don't go on strike.

They don't go on lunch breaks.

They don't need to go to the bathroom.

Robots can't sue the company.

Right.

You won't have to deal with the issues that a human worker might have.

So robots don't complain, for example.

And these are the sort of underpinning issues of why some Amazon employees have chosen to unionize because they complain about how physically demanding these jobs are and that they get little break times.

And so for Amazon, robot...

solves a lot of problems for them.

And over time, it's actually more cost-efficient in that way, too, because it's expensive to train employees to start jobs or to hire them.

Those orange Kiva droids could only do one thing, which was move shelves.

But over the last five years, Amazon has introduced new models, ones that could sort and pack.

This year, the company introduced a touch-sensitive robot it calls Vulcan.

This robot also has that sort of pressure sense that a human does.

And so it's able to be very gentle when it's grabbing items, something like a bar of soap as small as that or a notebook.

And now the bots don't just work independently.

One robot carts stuff for loading onto trucks.

Another helps sort items.

Another helps package bags.

AI systems have evolved in these past five years.

And part of the innovation with Amazon is not necessarily that they have the most advanced robotics in the world, but that they've been able to connect all the robots together.

There's more and more of what they call touch points are being handled by robots.

So there's different touch points within an Amazon facility, whether it's packaging, whether it's moving items from a truck.

And as time has passed, more of those touch points have been handled by robots.

Amazon's bet on bots has been good for business.

The company says workplace injury rates have dropped, though labor unions say they remain high.

Amazon also says that about 75% of its global deliveries now involve robots in some way.

And yearly productivity has skyrocketed as more machines work in tandem with humans.

So for example, Amazon years ago shipped about 175 packages per employee.

So the packages that it handled itself end-to-end without the help of UPS or USPS.

And that has gone up to about 3,800 or so per employee.

Dang.

So that's a tremendous productivity gain.

So it does sound like the robotics push has brought Amazon's business like major efficiency gains.

What does it mean for the people who are working alongside those machines?

How is it affecting them?

The jobs at Amazon are changing really rapidly.

I talked with one employee named Naysha Cruz.

Naysha, am I pronouncing that correctly?

Naysha like Geisha.

Naysha, okay, got it.

Thank you.

And she had a very interesting story because she started out as an average Amazon worker.

She started out as a picker.

No problem.

I'm going to go work at a warehouse as a picker.

And actually stayed at entry-level for five years.

But she had bigger goals for herself.

She wanted to have more of a technical job.

And so she sought out training that Amazon has to have a more advanced role within the company.

And then from there, there was an opportunity in Tempe, Arizona.

And she was able to be trained in how to oversee and manage robotics.

And she was able to move from her picking job to a desk job.

And she sits in front of a computer screen, making sure that robots around the world that Amazon has are working properly.

I currently don't have a degree, so the fact that I can come from a factory work setting to an office job, it's amazing to me.

Naysha's pay has also more than doubled from what she earned walking the warehouse floor.

Her story exemplifies what Amazon says it's trying to achieve, which is to have more technical roles for workers and less physically demanding roles.

They say that they've trained more than 700,000 people around the world with these sort of more technical tasks.

Fewer pickers, more technicians.

That's part of Amazon's vision.

But for the company's roughly 1.5 million workers around the world, most of whom are on the warehouse floor, Nasha's path might not be the norm.

Not every picker will go on to manage a fleet of robots.

Already, Amazon has slowed down hiring at its facilities.

Staffing is now at an average of 670 people per facility, according to a journal analysis.

That's the lowest it's been in 16 years.

For every Naysha cruise, there could be another person whose job is replaced entirely.

Right.

So jobs like Nasha had as a picker might not exist one day.

In a statement, Amazon says it's hired hundreds of thousands of employees in the last decade.

It also acknowledges that headcount is down, noting that their new sites have, quote, smaller employee footprints and help us deliver with greater speed.

Amazon's CEO, Andy Jassy, has also said publicly that the company anticipates its entire workforce will shrink due to AI.

There will be a day where we might not see many people inside of these facilities.

And as time passes, we could start to think of Amazon and see Amazon in a completely different way because of what they're doing with robotics.

Right.

Will they still even be the second largest private employer in the U.S.?

Right, that's a huge question.

Will they still be the second largest private employer in the U.S.

5, 10, 15 years from now?

Maybe not.

But someday, experts say, Amazon's warehouses could literally go dark.

Why is after the break?

During his time covering Amazon, my colleague Sebastian Herrera has heard experts and insiders kick around a term, one they use to describe what the company's warehouses could look like in the not-so-distant future.

Amazon years ago had this concept of a lights-out facility.

You don't have to turn on the lights because it's all robots and robots don't need lights to work.

Because robots don't need to see?

Aren't there cameras though?

They do have cameras, but those cameras can see in the dark.

Oh, that's so creepy.

According to my reporting and the experts I talked to, Amazon would love to have that sort of a facility where they don't need humans to be there, or they might just need one or two humans to come and repair the robots when they break down.

But it is not sci-fi to say that years from now you could walk into an Amazon facility and most, if not all, the lights are off, and you're in the dark just hearing whirring and buzzing around you.

Oh, my goodness.

goodness.

If we look 20 years into the future, the lights out facility could be something that is very realistic in that timeframe, according to experts that I've talked to.

Wow, 20 years.

It's really not that long if you think about it.

Although, you know, even in Star Wars, there were still people, right?

It wasn't like they were gone completely.

Somebody still had to fix the robots when they broke down.

Right.

Uncle Owen.

Yeah.

Uncle Sorry, tell you another bad motivator.

Look.

Hey, what are you trying to push on us?

Amazon told us that its robotics leadership does not believe in a fully lights out concept, nor does it think lights out is the, quote, optimal approach to serve our customers.

The company also said that, quote, people will continue to be at the center of how we operate effectively.

If you talk to Amazon, they are very big on the idea that humans will need to continue to exist inside their facilities.

but there's plenty of tasks that Amazon is replacing inside of its facilities with robots.

And that means that for some warehouse employees, the room is already looking dim.

The workers that I've talked to and the unions that I've talked to remain very concerned that Amazon, as it's deploying these robots, it's not thinking about how it's affecting its humans.

So for Amazon, they will say that these robots are all positive because it's making the jobs of human workers safer.

However, Amazon critics say that it is the human workers there that are the guinea pigs for

these robotic systems, whether they break down, whether an accident happens.

It's the human workers that have to deal with these situations.

A spokesperson for Amazon told us that, quote, innovation has been a core driver to creating a safer workplace for us.

It's interesting, if you look at Amazon's corporate website right now, they have this statement like in really big font at the top.

It says, in the past decade, Amazon has created more jobs than any other U.S.

company.

If Amazon led the last great hiring boom, could that be coming to an end?

That is a good question.

Amazon employs so many people throughout the U.S., and that means that it's responsible for a lot of the labor force in America.

And as Amazon replaces humans with robots, it could have a tremendous impact on our labor economy, on the economy as a whole.

My reporting has shown before that when Amazon raises pay in their warehouses, for example, other companies follow suit.

When Amazon has layoffs, other companies tend to follow suit.

Amazon recently announced return to work five days a week, and a lot of companies followed suit after that.

So if Amazon Amazon says robots are the future.

If Amazon says robots are the future, then that could mean that a lot of other companies start saying similar things.

We don't need as many employees in our offices anymore or in our warehouses anymore because if Amazon is doing it, it means that we can too.

That's all for today, Thursday, July 17th.

The journal is a co-production of Spotify and the Wall Street Journal.

Special thanks to Julie Chang and Desiree Rios.

Thanks for listening.

See you tomorrow.