Amazon commits $700 million to retrain U.S. workers in new skills

Alongside its increasing investments in automation, Amazon said Thursday it will spend about $7,000 per employee on new training initiatives for a third of its U.S. work force in the next five years — including a program to help its workers become more proficient in technologies such as machine learning.

The move comes amid a tight labor market, pockets of labor unrest at Amazon and growing fears of widespread job losses due to automation, all factors that could pose long-term challenges to the company and its competitors.

The Seattle-based commerce and technology giant pledged to give about 100,000 of its U.S. workers access to education programs it is developing in software engineering, IT and other in-demand fields. The “Upskilling 2025” pledge is expected to cost Amazon more than $700 million, it said.

One program is geared to employees without technical skills, helping them learn Amazon coding tools and practices. Another provides workers in Amazon’s fulfillment centers training and paid study time to become certified IT support technicians.

Amazon said it will also expand an existing apprenticeship program and its 9-year-old Career Choice program that pays the majority of tuition and provides on-site classrooms at fulfillment centers for employees to prepare for careers in nursing, commercial-truck driving and aircraft maintenance, among others. Some 25,000 employees have already participated.

For Amazon’s corps of coders, some of whom may find their skills lagging behind technology advances, Amazon is opening “Machine Learning University” — a series of six-week modules taught by Amazon employees in an area of technology the company says “plays an increasingly important role in customer innovation.”

Amazon has made the development and use of a wide range of artificial intelligence technologies a core part of its operations. It sees them as a critical enabler of its enormous scale and continued growth. From new robots in its fulfillment centers to its “hands off the wheel” approach to automated demand forecasting and negotiating with suppliers to its cashierless convenience stores, Amazon has invested heavily across its businesses.

The company emphasizes its continued hiring despite, and in some cases, because of these investments in automation. In June, at its inaugural re:MARS conference — focused on “Machine Learning, Automation, Robotics, and Space” — it announced a new kind of mobile conveyor-belt robot called Pegasus. Amazon disclosed it has added more than 200,000 robots that do tasks such as stacking totes and moving racks of merchandise around its global fulfillment centers since acquiring Kiva Systems in 2012 — the same year it launched Career Choice.

The company also highlighted jobs created since then: It has hired some 300,000 people around the world since 2012, including some tasked with tending the growing fleet of robots. Amazon says it expects to have 300,000 U.S. workers by the end of the year.

Amazon robotics executive Brad Porter said at the conference that automation is key to the company’s move to faster shipping speeds, describing “the symphony of humans and robots.” Earlier this year, Amazon pledged to make one-day delivery standard with its pay-ahead Prime delivery and media subscription.

But that acceleration has rankled some Amazon fulfillment-center employees. A group in Minnesota is planning a strike next week during the company’s Prime Day sale, as have workers in its European warehouses. Amazon workers in Portland plan rallies outside company facilities there, according to a Facebook post by the PDX Amazon Workers Solidarity Campaign.

Stuart Appelbaum, president of the Retail, Wholesale and Department Store Union, which has sought to organize Amazon workers, said the move to one-day shipping is taking a greater toll on employees who are struggling to keep up.

“Testing hundreds of thousands of workers’ physical limits as though they were trained triathletes is the wrong approach. … Amazon needs to understand that human beings are not robots,” Applebaum said in a statement, suggesting Amazon should hire more people.

Dave Clark, the executive in charge of Amazon’s worldwide operations business, said on Twitter Thursday that the company “Hired 5,000 full-time associates in June, and … will add 15,000 more full-time associates to our team before the summer is over.”

Amazon has thousands of job openings across the company, and highlighted U.S. Bureau of Labor Statistics data suggesting the country has more job openings than unemployed people. A tight labor market is part of what drives companies to invest in automation.

Other companies have made career training a part of their pitch to would-be employees. In 2014, Starbucks began a partnership with Arizona State University to offer discounted tuition and subsidies to employees who want to earn a degree online.

Amazon has also raised wages to a minimum of $15 an hour, with benefits including health insurance.

By training its own employees for higher-value positions in technology development, Amazon aims to hold on to the workers it has — and attract new hires with the prospect of career advancement. That said, Amazon employees who gain skills through the new programs can take them elsewhere.

“While many of our employees want to build their careers here, for others it might be a stepping stone to different aspirations,” said Beth Galetti, Amazon’s senior vice president of human resources, in a news release.

But the broader societal fear about job loss due to automation represents a long-term risk to the company, said Tom Forte, managing director at D.A. Davidson, in a research note on Amazon’s 25^th anniversary last week.

“How will society react when technology empowers job losses on large scales,” Forte wrote, adding, “this is not an issue limited to Amazon.”

Walmart, for example, is investing in automation in its stores, such as robotic floor cleaners.

Forte, writing before Amazon’s latest announcement, said Amazon is well-positioned to address the potential tumult in the labor market that automation may create.

“Working in Amazon’s favor is the company’s ability to 1) create job growth, internally and 2) train its own employees to be able to embrace whatever the future may hold for jobs both within and outside of Amazon.”