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).
Subscribe to The Week
Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.
Sign up for The Week's Free Newsletters
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
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.”
–––––––––––––––––––––––––––––––For a round-up of the most important stories from around the world - and a concise, refreshing and balanced take on the week’s news agenda - try The Week magazine. Start your trial subscription today –––––––––––––––––––––––––––––––
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.
Create an account with the same email registered to your subscription to unlock access.
Sign up for Today's Best Articles in your inbox
A free daily email with the biggest news stories of the day – and the best features from TheWeek.com
William Gritten is a London-born, New York-based strategist and writer focusing on politics and international affairs.
-
A history of student protest at Columbia University
The Explainer Anti-Israel demonstrations at NYC's Ivy League university echo protests against Vietnam War and South African apartheid
By Harriet Marsden, The Week UK Published
-
'Trump is ruled in contempt'
Today's Newspapers A roundup of the headlines from the US front pages
By The Week Staff Published
-
Hainault sword attack: police hunt for motive
Speed Read Mental health is key line of inquiry, as detectives prepare to interview suspect
By Arion McNicoll, The Week UK Published
-
The birth of the weekend: how workers won two days off
The Explainer Since the 1960s, there has been talk of a four-day-week, and post-pandemic work patterns have strengthened those calls
By Chas Newkey-Burden, The Week UK Published
-
Amazon vs. the FTC: Behind the monumental antitrust showdown
Under the Radar The Federal Trade Commission is taking on the e-commerce giant for allegedly building a monopoly in the online market
By Theara Coleman, The Week US Published
-
Why household wealth took off during the pandemic
Under The Radar The Covid-19 pandemic caused a lot of pain and hardship, but new research shows it also left most Americans wealthier
By Justin Klawans, The Week US Published
-
Amazon, the 'everything store,' goes to court
Feature Does the retail and tech giant actually have a monopoly or is that argument a bit of a stretch?
By The Week Staff Published
-
Why the FTC antitrust lawsuit against Amazon is so consequential
Talking Point While it's not the first case the federal agency brought against the company, it might be the biggest challenge yet
By Theara Coleman Published
-
Empty office buildings are blank slates to improve cities
Speed Read The pandemic kept people home and now city buildings are vacant
By Devika Rao Published
-
Inflation vs. deflation: which is worse for national economies?
Today's Big Question Lower prices may be good news for households but prolonged deflation is ‘terrible for the economy’
By The Week Staff Published
-
Amazon slashes its way to higher profits
feature The tech giant has had a tough few years. But are things on the up and up?
By The Week Staff Published