Think Robots Will Inevitably Take Your Job? Amazon Proves Otherwise

Have you ever worried about the possibility of today's increasingly capable robots eventually devastating our job market?

It might be time to reconsider that train of thought.

Earlier this week, Amazon  (NASDAQ: AMZN  )  announced it'll hire 70,000 temporary employees for the upcoming holiday season, or a 40% increase over last year's seasonal hiring. Better yet, Amazon says, it expects thousands of those temps to be able to secure permanent, full-time positions going forward.

And that's on top off the more than 7,000 temporary employees Amazon has converted to full-time status so far in 2013, including the more than 5,000 full-time jobs for which they began hiring at the end of July.

Here's why it's important
So, what's all this have to do with robotics?

If you recall, last year Amazon spent $775 million to acquire Kiva Systems, the builder of its fun-to-watch fleets of orange, shelf-carrying, warehouse-optimizing robots.

Image source: KivaSystems.com

Of course, an actual human is still required to pick the items out the respective bins even with the Kiva robots doing their thing, but Kiva's solution is exceptionally effective in that it takes much of the load off of exhausted workers. In fact, prior to the acquisition, some of those workers used to complain of walking more than 15 miles per day, and now are no longer required to physically locate everything Amazon's millions of retail customers order.

Still, many people worried at the time Amazon's increased efficiency would ultimately translate to fewer warehouse jobs for the ever growing ranks of work-starved citizens.

But instead of cutting jobs to boost profitability, Amazon has consistently used its fanatical quest for improved efficiency to both lower the prices of its goods and reinvest in growing its infrastructure.

This, in turn, translates to higher sales -- remember second quarter revenue increased 22% to $15.7 billion -- and, most pertinent to this conversation, a larger number of employees required to fulfill those orders.

But wait, you say, how are Amazon's low prices affecting other retailers? Couldn't it be that the net effect of Amazon's efficiency gains are achieved to the detriment of jobs from its brick-and-mortar competitors?

After all, Target  (NYSE: TGT  ) decreased its own seasonal hiring by 20% this year to 70,000 part-time employees on the heels of anemic sales growth last quarter, which eventually resulted in the company lowering its full-year 2013 guidance a little over two weeks ago.

But remember, Target's operations are currently exclusive to the U.S. and Canada, so they are tied specifically to the strength of cash-strapped North American consumers. Amazon, by contrast, received nearly 40% of its revenue outside of North America last quarter.

Global retail stalwart Wal-Mart  (NYSE: WMT  ) seems a better direct comparison from a hiring perspective. What's more, Wal-Mart even remained firmly in the same boat as Target last quarter as it also missed sales estimates while at the same time reducing full-year expectations.

But the world's largest retailer also announced just last week it is increasing its number of part time hires this holiday season by 10% to 55,000, which calls into question the argument that Amazon could be cannibalizing jobs from its closest retail competitors.

In the end, it's evident as companies like Amazon continue to grow more efficient -- even through the use of robotics, which intuitively seems to negate the need for more human jobs -- they aren't necessarily seizing the opportunity to cut employment in the name of boosting short-term profitability.

Instead, and to its benefit over the long term, Amazon is intelligently focusing on growing its business in a number of other ways.

First, noting CEO Jeff Bezos' oft-repeated mantra, "Your margin is my opportunity," the folks at Amazon have made no secret of the fact they love to further reduce their already low prices and pass those savings onto consumers.

Second, and as a positive consequence of the resulting increased demand, Amazon is then able to happily create new jobs for an even larger number of people going forward.

We'll always have a place in our own world
Sure, the Kiva robotic system is a limited example in which humans are still required, and there certainly exist other types of robots that can now complete entire workflows with minimal human involvement.

But as the old saying goes, "Necessity is the mother of invention."

To be sure, our roles might change as the field of robotics continues to advance, but no matter how much we find ways to autonomously streamline our work, it seems a safe bet we'll always be able to invent new, better ways to keep people employed.

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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 October 06, 2013, at 12:05 AM, ScottAtlanta wrote:

    Optimistic take on things.

    You minimize the ultimate impact of robotics and A.I. on many manual labor sorts of jobs. Amazon's transition and temporary need for workers for a few years until technology proceeds -- does not substantively counter the trend of robotics and AI.

    The hopeful and optimistic "we'll always invent..." ways to keep people employed....doesn't adequately address the mega-trend of robotics replacing manual laborers.

    It may be that we create things for humans to do....but there will be serious changes to support that....perhaps socio-economic-political changes....in addition to bio-enhancement to expand our thinking and functioning....otherwise the average 100 IQ person and less (yeah, that's 50% of the population)....won't keep up (you'll really need a 130+ IQ...soon enuf to be a supervisor to run the machines, program them, and eventually enhance your cogntive functioning to interact with them -- to be truly "employed"....otherwise you'll be supported by the system as an unenhanced anachronism).

    Get ready for your nanobot injections! Z'all I'm say'in.

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