Amazon Squandered and Gambled - Now They’re Cutting Peak Pay and Laying People Off

Top execs invested lavishly in a number of losing ventures and pet projects, spending money on everything but wage increases and jobs. 

This holiday season Amazon is the real grinch, laying people off and ending peak pay for its workers laboring overtime to deliver presents. Unionizing workers at the Northern Kentucky Air Hub (KCVG) for example, have been robbed of the seasonal $2/hr increase in wages that Amazon paid last year. Instead, Amazon has offered insulting “cost-of-living” raises as low as $0.40/hr in some areas. Today Amazon announced it was laying off 10,000 workers, the largest layoff in the company’s history. 

Where did Amazon’s profits go? The bosses spent it on themselves or squandered and gambled it away.

The recent pay cuts and layoffs come from Amazon bosses panicking to lower costs. When everyone was locked down during the pandemic, the corporation made an easy profit of $21 billion in 2020 and $33 billion in 2021. But this year, Amazon has lost $3 billion so far. Amazon’s retail division in particular has lost $2.6 billion in North America and $5.5 billion in the rest of the world. 

These retail losses have been covered by high-tech Amazon Web Services (AWS), a major cloud computing provider, which made a profit of $17.6 billion since the start of the year. But even that star has begun to fade, as AWS grew at its slowest pace this year. Now the corporation has issued a glum prediction that for the rest of the year, it will earn an overall profit of $0-4 billion.

In September, Amazon execs closed several dozen delivery stations and warehouses, and halted or delayed construction on dozens of others. Last week, they froze all hiring for corporate roles. Management is in extreme penny-pinching mode, ordering workers to dangerously overload delivery vehicles and looking for other ways to save money in the warehouse. CEO Andy Jassy has started a “cost-cutting review of the tech giant and paring back on businesses at the company that haven’t been profitable.” (WSJ)

How can Amazon lose money when its workers are overworked to the point of injury or death? Are workers to blame for Amazon’s loss of profitability? As much as Amazon execs like to point fingers, the blame lies solely with them and the rest of big corporations. Amazon only spent $2 billion more on fulfillment this year compared to last year. A good chunk of that is not even worker pay but corporate costs. By comparison, Amazon spent $6 billion this year on stock buybacks, with $4 billion more planned. That alone is double this year’s total corporate losses, and six times what Amazon spent on its recent insulting “raise.”

Amazon’s upper management have utterly mismanaged and squandered the company’s pandemic windfall, and are dumping the consequences on workers. They assumed that online shopping was going to forever grow exponentially, and doubled Amazon’s warehouse space to 525 million sq ft by the end of 2021. This year, as consumers return to in-person shopping, Amazon had to reverse course and shutter or halt construction on 53 million sq ft of warehouse space.

Top execs invested lavishly in a number of losing ventures and pet projects, spending money on everything but wage increases and jobs. 

Amazon bought shares of electric vehicle startup Rivian, whose stock cratered 66% this year after Ford and other proven competitors released their own electric vehicles. Amazon has lost $10.4 billion so far on that investment. The company’s devices unit, which includes Jeff Bezos’s favored creation Alexa, loses more than $5 billion a year because privacy-conscious customers won’t buy Alexa devices unless the company sells them at a loss. And Amazon had been on a corporate spending spree, buying moviemaker MGM for $8.45 billion and spending $4 billion more on sales, marketing, and administration than last year.

One of the biggest loss items for Amazon is a $7.3 billion increase in the cost of buying goods for sale. This is why even though Amazon sold 10% more goods this year, it still lost money. As global trade slows and the economies of US and China decouple because of inter-imperialist rivalry, importers and exporters will be hit especially hard. Joe Biden’s saber-rattling against China and Xi Jinping’s nationalist responses are not confined to the news, but have come home to roost as economic protectionism and global economic winds batter US import companies and Chinese advanced manufacturing. 

The bosses have their golden parachutes if things go south, it’s the workers who are really caught in the crossfire.

For this year’s peak season, Amazon is set to work its warehouse associates harder than ever. Management is saddling workers with the consequences of their complete mismanagement and global economic headwinds. On November 3rd, Amazon management assigned workers a weekly mandatory overtime (MET) shift from November 27th to December 23rd during Peak Season, with only three weeks' notice, leaving many workers to scramble over alternative plans for necessities like child care, second jobs, course schedules, etc. 

On top of that, there is still an ongoing labor shortage. Amazon needs workers for peak season and will offer new workers a “good” (less rotten) pay deal with large signing bonuses, to get people into the warehouse but also to sow divisions between long-time workers and newcomers. But if overloaded delivery vans are any indication, management will overburden new and old workers alike with unreasonable work at unreasonable pay. 

Behind the fantasy of Amazon’s digital one-click instant delivery, is a massive human mechanism sorting, picking, packing, and delivering goods. This is an oppressive, technologically unadvanced, low-profit-margin system that depends on squeezing as much work out of workers as possible.

Workers deserve more. Where has peak pay gone? Straight into the pockets of the bosses, who spent it on themselves or squandered it on gambles. That’s why workers at KCVG are fighting for $30/hr starting wage and 180 hours of paid time off. The next time Amazon says they can’t afford to pay $30/hr we’re gonna remind them they gambled our pay away. If you work at Amazon and want to fight for higher pay and better conditions, contact us and pledge for the union!

Workers at Amazon’s Largest Air Hub Seek Union and $30 Per Hour!

In late September, Amazon announced that workers company-wide would not receive the expected $2 per hour “Peak Pay” increase during the period of breakneck pace over the holiday season. Since then, we’ve also learned that Amazon squandered billions on stock buybacks and failed investments. However, at the time, it was clear that workers here at Amazon were fed up. 

Thousands of workers around the country took to Amazon’s “Voice of the Associate” board in outrage over Amazon’s insulting ‘cost-of-living’ raises, which were as low as $0.40/hr in some areas, essentially amounting to a pay cut given the ongoing impact of inflation. Workers at the Cincinnati/Northern Kentucky Air Hub, known to workers as KCVG, immediately started petitioning our coworkers for the raises we deserve. 

They found that hundreds of their coworkers felt the same way, and in addition to the peak pay issue, workers began raising other demands about our workplace. On November 3rd, Amazon management assigned workers a weekly mandatory overtime (MET) shift from November 27th to December 23rd during Peak Season', with only three weeks' notice, leaving many workers to scramble over alternative plans for necessities like child care, second jobs, course schedules, etc. 

A growing group of workers at the Northern Kentucky Air Hub, a $1.5 billion facility where Amazon packages are sent by plane across the country, began talking about how the only way to win any lasting change at Amazon would be by forming a union to fight for what we want.  We met almost daily after work to discuss the key demands, make decisions democratically, decide the next steps in the campaign, and formalize our independent group of coworkers. 

The next step is to put forward our demands, launch our campaign to unionize our workplace, and begin seeking an existing union that is willing to collaborate with our organizing committee to collect union authorization cards.

Launching Unionize Amazon Northern Kentucky (KCVG)

Our most popular demand is for a $30 per hour starting wage. Amazon workers have made Jeff Bezos the second or third-richest man in the world depending on the week. On top of that, inflation has sent prices of basic necessities like gas, groceries, and rent through the roof. Winning $30/hr at Amazon KCVG would allow us to afford a better standard of living, and raise the expectations for all workers to fight for more.

In addition, workers are calling for 180 hours of paid time off, without a cap on accrued time. Steven Kelley, a Learning Ambassador at KCVG said “We’re working to live, not living to work. Amazon’s annual turnover rate is 150% because we’re running ground support equipment (GSE), supervising planeside operations and training our coworkers without a real pay incentive. We deserve to be paid for those responsibilities and have real time off for ourselves and our families.”

Workers are also fighting for union representation at all disciplinary meetings. Management selectively enforces the rules in our workplace to intimidate us,” said Annie Gilb, a ramp worker at KCVG, “With a union, we will have clear disciplinary standards, representation in every meeting with HR or management, legal resources, and a transparent process to address grievances.”

There are many other important demands around seniority, transparency, and safety that workers democratically discuss at our weekly meetings. We understand the importance of continuing to identify important issues, especially from KCVG workers of different genders, ethnic or racial backgrounds, and job categories. 

These demands are included in the campaign’s initial trifold leaflet, which includes Spanish and French translations to be accessible to the widest possible layer of workers at the facility, many of whom speak English as a second language. “In order to win a union, we have to act like a union,” said Griffin Ritze, a cargo tug driver at KCVG. “Unions are built on clear demands like $30/hr, a basis of mutual respect and solidarity with our coworkers, and a willingness to take collective action to win.”

Taking On Amazon, A Union-Busting Giant

Amazon is well aware of the polls that show 71 percent of workers support unions. That’s why the only way Amazon can succeed at stomping out a unionization effort is to lie, manipulate, and intimidate workers to vote against their own interests. Their union-busting apparatus pushed them to victory in the union elections in Staten Island, NY at the LDJ5 fulfillment center and in Albany, NY at ALB1.

KCVG workers know we need to get out ahead of Amazon’s union-busting operation. “Amazon won’t explain that dues make our union strong by giving us the resources we need to win our demands and defend us from retaliation.” said Braeden Pierce, a Ramp worker at KCVG, “We vote on the amount, which will always be much lower than the raise we win in a contract.”

Amazon can spend endless amounts of money on union-busting. We push back against this by pointing out that our union’s messaging and strategy at KCVG is decided democratically by the workers ourselves. Amazon’s high-paid, professional consulting firms who come up with misleading anti-union lies are the real ‘third party.’

While Amazon viciously opposes unions, Amazon couldn’t operate without unionized labor. Amazon Air pilots are members of Teamsters 1224. Union labor builds Amazon’s warehouses. Unionized workers at UPS and the USPS handle a third of Amazon’s deliveries. These workers can directly support the struggle by refusing to cross picket lines and handle Amazon’s packages in the event of pickets, walkouts and strike action.

Individual union workers have already stepped up. “The second I learned about the organizing at the Airhub, I immediately donated $1000 of my own salary to the cause,“ said Ryan Timlin, the President of Amalgamated Transit Union Local 1005, “The rest of the labor movement needs to put real resources into supporting these workers too.”

Amazon’s Largest Air Hub

Amazon Air was flying 187 daily flights as of March of 2022, doubling in size over the last two years. They are poised to keep growing. A third of the newest conversion of the 737 cargo jets have been purchased by Amazon. The development  of major Air Hubs in Leipzig/Halle (Germany), San Bernardino, and Cincinnati / Northern Kentucky has positioned the company’s air freight network within 100 miles of 73% of the U.S. population and expanded their distribution in Europe.

Jeff Bezos personally broke ground on the KCVG Air Hub in 2019. After spending $1.5 billion up front, the facility began operations in July 2021 and is intended to become the epicenter of Amazon’s air freight operations where their Network Control Center is headquartered. The site’s  implementation of robotics technology is unprecedented for Amazon's network to facilitate the processing of air freight. Through completion of the site’s first phase of development, its current parking capacity is 33 planes, though it will eventually have enough aircraft parking for 100 cargo planes. For reference, the UPS Worldport in Louisville Kentucky has capacity for 125 planes. 

New flights are being added every week. Currently this facility alone processes upwards to 35% of freight in Amazon's network, with further development bringing the site’s share of volume upwards to 80%. The work we do here constitutes a huge amount of Amazon’s profits that the company has invested in; this in turn gives us enormous leverage in organizing to win what we deserve. 

“Being able to successfully win this campaign would give us the ability to help our fellow workers get the benefits they deserve. It would give the workers the right to decide what is best for them“ said Jordan Martin, a ramp worker, “A victory at KCVG would inspire Amazon workers everywhere. We need as much support in this endeavor as possible and that's why we'll work as hard as we can to represent our coworkers.”