Amazon thrives during pandemic - but comes under pressure
This is a crisis tailor-made for an e-commerce giant like Amazon, and business is booming, even as it faces criticism
With much of the world subject to stay-at-home lockdown conditions because of the coronavirus pandemic, Amazon, with its vast infrastructure already in place to deliver products direct to the consumer, has been one of the crisis’s few beneficiaries.
The company’s share price rose 5.3% on Tuesday alone. Jeff Bezos, its founder and largest shareholder, has seen his fortune swell by $24bn (£19bn) since the outbreak began.
With a new net worth of $138bn (£110bn), his position as the world’s richest person has only been cemented, and Amazon is now worth $1.14trn (£914bn).
In total, says The Guardian, customers are spending almost $11,000 (£8,820) every second on the company’s website.
And yet, even while the business is thriving, the paradigmatic Silicon Valley success-story is coming under increasing pressure from a public relations standpoint.
In France on Tuesday, after a complaint by union representatives, a civil court outside Paris ruled that Amazon had failed to sufficiently protect warehouse workers against the Covid-19 threat, ordering that it must limit its deliveries in the country to essential items - hygiene and medical products and food - until it could show it had improved conditions.
The company was ordered to pay a fine of €1m (£872,000) per day until it had resolved the issue. Then, on Wednesday, Amazon announced it would halt its French operations in response - the shutter begins today as the company plans to appeal the ruling, reports CNN.
“We must temporarily suspend activities in our distribution centres in France,” the company’s French branch said in a statement, “despite the huge investment that we have made to ensure and strengthen by additional measures the safety of our employees who remained mobilized during this crisis.
“Considering the complexity inherent in our logistics activities and the fine of one million euros per infraction imposed by the court, the risk of contravening the decision was too high.”
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The decision to halt operations highlights just how essential the global retail giant has become. In its statement on Wednesday, the company drew attention to this.
The ruling “is likely to have consequences for many people in our country”, it said - adding the impact extends to the company’s employees and customers, but also French businesses which make sales on Amazon’s platform.
In the US, it hired 175,000 additional workers in March and April to meet the surge in demand, reports CNBC.
The e-tailer has, however, come under increased pressure for conditions at its warehouses, and recently fired four employees who raised concerns and organised protests over the issue. An Amazon spokeswoman said two employees were fired for “repeatedly violating internal policies” and two others were fired for “violating social distancing guidelines”.
Christy Hoffman, General Secretary of the UNI Global Union, told the BBC: “Amazon’s more concerned about expanding its power, its influence, its market share in this period than it is about protecting workers.
“When you’ve got positive cases in 50 warehouses, and each of those persons are working closely with many others, it’s very hard to say it won’t be a source of spread.”
The company has insisted safety is paramount and that it is offering an extra $2 (80p) per hour, double pay for overtime and two weeks’ unpaid leave for workers who test positive.