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Amazon Hiring 5,000 in Warehouses to Meet Customer Demand

Higher spending contributed to Amazon's surprise net loss for the second quarter as the online seller continues to fuel revenue growth at the expense of profits. Photographer: David Paul Morris/Bloomberg
Higher spending contributed to Amazon's surprise net loss for the second quarter as the online seller continues to fuel revenue growth at the expense of profits. Photographer: David Paul Morris/Bloomberg

July 29 (Bloomberg) -- Amazon.com Inc. is boosting staff in 17 U.S. warehouses, adding more than 5,000 full-time jobs to meet brisk demand for products sold by the world’s biggest Web retailer.

The new hires will join more than 20,000 employees working at Amazon’s more than three dozen U.S. fulfillment centers, the Seattle-based company said in a statement today. Amazon is also hiring 2,000 customer-service staff, including part-time and seasonal workers.

The retailer plans to open five more facilities this year, after adding 20 last year. Warehouse expenses have more than doubled during the past three years, as Chief Executive Officer Jeff Bezos opens centers full of products closer to consumers in order to reduce shipping costs and speed up delivery. Higher spending contributed to Amazon’s surprise net loss for the second quarter as the online seller continues to fuel revenue growth at the expense of profits.

“As we get closer and closer to customers with fulfillment, we have seen growth,” Amazon Chief Financial Officer Thomas Szkutak said on a conference call July 25.

That growth is also being driven by Amazon Prime members, who pay $79 a year in exchange for unlimited two-day shipping and access to streaming video, Szkutak said.

“Because of our fulfillment logistics capability, we’ve been able to offer Prime broadly,” Szkutak said.

Subscribers to the shopping program spend three to four times more than those who aren’t members, according to Colin Sebastian, an analyst at Robert Baird & Co. in San Francisco who rates the stock the equivalent of a buy.

Amazon’s distribution-center costs are driven in part by wages. Median pay is 30 percent higher than “people who work in traditional retail stores,” the company said. That pay doesn’t include stock grants available to full-time employees, which have added an average of 9 percent to base pay annually during the past five years, Amazon said.

To contact the reporter on this story: Danielle Kucera in San Francisco at dkucera6@bloomberg.net

To contact the editors responsible for this story: Pui-Wing Tam at ptam13@bloomberg.net; Nick Turner at nturner7@bloomberg.net

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