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Amazon Using Higher Pay to Lure Employees to Grocery Unit

By Danny Vena - Mar 30, 2020 at 12:26PM

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High demand is forcing the e-commerce giant to poach from itself.

In the face of surging demand and a shortage of employees, Amazon (AMZN -1.24%) is offering higher pay for workers to move to its Whole Foods Market to pick groceries and pack them for home delivery. The practice, known as labor sharing, has the e-commerce giant shifting workers to the areas of greatest need within its business. With an increasing number of consumers on lockdown and foregoing trips to the grocery store except when absolutely necessary, many are turning to home delivery as an alternative. 

"The Prime Now business has seen a mass increase in volume and is now offering labor share opportunities," Amazon said in a memo to its warehouse workers. The communique was sent to fulfillment staff in states where the company has grocery delivery operations.

A Whole Foods Market store lit up at night.

Image source: Whole Foods.

The deal is a potentially lucrative one for employees that accept the transfer. Amazon had already bumped warehouse pay from $15 to $17 earlier this month. Those workers that make the move to grocery will be paid $19 per hour.

Amazon has been forced to make many changes on the fly as the COVID-19 coronavirus outbreak continues. The company announced two weeks ago that it would stop accepting delivery of non-essential items at its warehouses to open up space for consumer staples and much needed medical supplies. At the same time, Amazon is seeing employee shortages and announced that it was looking to hire 100,000 full- and part-time warehouse and delivery workers to meet the unprecedented demand for its e-commerce services.

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Danny Vena owns shares of Amazon. The Motley Fool owns shares of and recommends Amazon and recommends the following options: short January 2022 $1940 calls on Amazon and long January 2022 $1920 calls on Amazon. The Motley Fool has a disclosure policy.

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