Is Amazon.com a Sweatshop?

It's the holiday shopping season, so you know somebody has to play the part of Ebenezer Scrooge. According to London's The Sunday Times, the bossy blowhard is none other than Amazon.com (Nasdaq: AMZN  ) .

In a scorching article, the paper delves into the demanding conditions of the company's U.K. fulfillment center in Bedfordshire. Among the allegations cited:

  • Workers must put in a 10 1/2-hour graveyard shift over the weekend, apart from the five-day workweek.
  • Employees face dismissal after taking six sick days.
  • High quotas are set for productivity. For example, someone packing Xbox consoles for shipment must complete 140 units an hour

Naturally, this is just one side of the story. Conspiracy theorists may also note that the article came out on the eve of the busiest online shopping day of the season. If there was ever an opportunistic time to kick Amazon, that would be it. Amazon is also coming off a decent quarter where it hosed down its fourth-quarter outlook.

However, these are the holidays. Retailers -- dot-com and mall-based -- put in hard hours to meet the seasonal peak in demand.

Work is work, after all, and even the Amazon website emphasizes a heavy work ethic.

"We live in a time of unheralded revolution and insurmountable opportunity -- provided we make every minute count," reads an entry entitled "bias for action" under the website's employee values description.

Retailers can be ruthless this time of year, but Amazon can't afford to have its reputation tarnished. Several of the reader comments at the end of the article indicated that shoppers would be turning elsewhere for their holiday needs. If the overseas story begins to fester domestically, you can just imagine online chains like Overstock.com (Nasdaq: OSTK  ) or real world juggernaut Wal-Mart (NYSE: WMT  ) looking to catch some of Amazon's defecting shoppers.

But it shouldn't come to that, not in this tough economy. Eyeing some of the entries in Fortune's latest "100 Best Companies to Work For" list, you see names like Starbucks (Nasdaq: SBUX  ) and eBay (Nasdaq: EBAY  ) that have been letting employees go as they scale back. Even chart-topper Google (Nasdaq: GOOG  ) is hacking away at some of its industry-envious perks.

Ultimately, Amazon will have to fire back because the last thing it wants to be seen as is a sweatshop. Scrooge eventually comes around, but you have to write your own happy endings sometimes.  

Other headlines to rock out to:

Wal-Mart Stores, Starbucks, and eBay are Motley Fool Inside Value selections. Google is a Motley Fool Rule Breakers pick. Starbucks, eBay, and Amazon.com are Motley Fool Stock Advisor picks. The Fool owns shares of Starbucks. Try any of our Foolish newsletters today, free for 30 days.

Longtime Fool contributor Rick Munarriz has been shopping online for about as long as Amazon.com has been in business. He does not own shares in any of the stocks in this article. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.


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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On December 16, 2008, at 2:44 PM, juliehowe wrote:

    If they don't like the working conditions, then why don't they quit and find another job?

  • Report this Comment On December 17, 2008, at 2:06 AM, goodstreet wrote:

    You want I should laugh so hard I die from heart attack, maybe? Amazon.com is a sweatshop so pc shoppers will fill their hollyday needs by going to wal~mart instead? Wally World is #1 sweatshop employer of the universe. How absurd & ludicrous to read this snippet & be told shoppers will go to wal~mart to teach amazon that we informed consumers won't support or stand for sweatshop work conditions!! I was a wal~mart associate for 7&1/2 years & am shocked that wal~mart is considered an alternative to amazon because amazon overworks its employees. Shoppers may as well shop at amazon because wal~mart treats its associates as poorly, & in my opinion far wrose, as amazon. Let me educate shoppers so when they choose not to shop amazon they won't shop wal~mart as a righteous alerenative:

    1) On Thanksgiving night department managers & their #1 assistant are required to report to work by midnight to bring out pallets of merchandise & set them up for the "blitz", known to the rest of the world as "black Friday." Assoicates work a minimum of 12 hours on Thanksgiving night.

    3)The Saturday before Thanksgiving department managers & assistant must work to stack & shrink wrap the blitz merchandise & put it in the back room. They work for 10-12 hours .

    2) Christmas night department managers must be at work at 11pm to straighten up the store & arrange all the clearance items for the day after xmas sale & work from 10-12 hours.

    3) The 2 weeks before xmas dept mgrs & assistants are required to work overnight for 10-12 hours.

    3) When department layouts change associates must work the nocturnal shift for 10-12 hours for 3-7 days..

    All of the employees required to work overnight normally work day shifts.

    4) Associates who are sick, running temperatures, etc, are not allowed to go home during the xmas peak shopping season.

    Wal mart expects employees to comply with these long shifts & that they switch from day to overnight when it benefits the store.

    There are many more practices & expectations which place wal mart at the head of the pack of sweatshops.

    Goodstreet

  • Report this Comment On December 17, 2008, at 11:41 AM, hong1zhou wrote:

    Anyone who works at eBay knows that it's not one of the top 100 companies to work for any longer.

    Unless you're me, who is allowed by management to not do my job up to par and who is allowed to sleep in my cube daily. I can't wait to be promoted next quarter.

  • Report this Comment On December 17, 2008, at 11:48 AM, ayamore wrote:

    Amazon talks a good game but they are lousy anymore. Three Items I ordered on December 12 will not be available for shipping until January15 or later, and or maybe not. My guess is Amazon suppliers are jumping ship! They make no money selling on Amazon....All the good stuff is vanishing...Free shipping is vanishing...The rest is all hype, cheap stuff from China marked, made in the USA... retail $300.00 buy now for $19.95...Amazon is a total crock! At least when you buy at Walmart it's priced at $19.95 and you know it's made in China!

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