Amazon faces scrutiny as operations return to normal

On Amazon.com, the banners that warned customers of delivery delays have vanished, promotions have returned and, as you browse, the site once again eagerly suggests other items you should add to your basket.

Amazon is not declaring victory yet. But after two months of heavy disruption, the state of emergency at the ecommerce giant is drawing to an end. However, scrutiny over how it handled the crisis is only just beginning, with politicians demanding more accountability and transparency.

On Wednesday, Amazon started returning its delivery estimates, which in some cases had ballooned to as long as a month, to typical levels. In the most of the US, that means one or two-day delivery, even for non-essential goods.

The company has also reinstated other delivery options, such as “Amazon Day”, where customers can group multiple orders together and arrange for delivery on a chosen day of the week.

Third-party sellers, which make up the bulk of sales on Amazon, were told on Sunday they could resume full operation, having previously been limited to essentials. Amazon has also reinstated punishments for sellers with high rates of cancellations, late shipments or defects, ending the grace period that applied during the coronavirus pandemic.

But analysts warned that while the company’s operations return to normal, its costs will continue to be high. Amazon warned that its cost of doing business during the coronavirus crisis could reach $4bn in the second quarter and that it might swing to its first quarterly loss since 2015.

“This is going to be a long, hard slog through what is likely to be a multi-quarter, if not multiyear event,” said Brent Thill, an analyst at Jefferies. “I do not think we are out of the woods entirely.”

Mr Thill noted that Amazon’s normal efficiency had been highly disrupted, with staff now needing to spread out on the warehouse floor to comply with social distancing guidelines and to stagger shifts to reduce congestion at entrances and exits.

A continuing source of strain for Amazon during the crisis is meeting demand for groceries, while footfall at its Whole Foods chain is limited by social distancing rules.

The company has converted five of its Whole Foods branches into so-called “dark” stores, serving online orders only. One other store, in San Francisco, closes its doors to walk-in customers at lunchtime each day.

But a waiting list for new online groceries customers has now been lifted in about 80 per cent of markets, the company said. Prime Pantry, a bulk-buy groceries and household essentials service, is back online, having been shut down in March.

For staff, the return to “normal” has consequences. From June 1, the $2-an-hour Covid-19 pay bump given to logistics staff will come to an end. So too will the added overtime payments for employees in North America.

Amazon already ended its temporary policy that allowed staff to take unlimited unpaid leave if they felt uncomfortable coming to work — or had other issues, such as childcare, for which the company said employees could still request managers make exceptions.

Monica Moody, a worker at an Amazon facility in North Carolina and part of the Athena workers’ rights group, is incensed. “We are literally watching each other get sick every day, and it’s not slowing down,” she said. “At a minimum, hazard pay should be extended for the entire length of this pandemic. If we are putting our lives at risk to pack and deliver Amazon packages, we deserve to be paid for it.”

The degree to which workers are getting sick is unclear. Earlier this week, attorneys-general from 13 states — including New York and Amazon’s home state of Washington — demanded the company provide a state-by-state breakdown of how many workers have tested positive for the virus, as well as the number of those who have died.

Amazon has so far refused to share that information, other than to confirm cases that have come to light via information shared on social media by employees or leaked to the media. At least three employees have died, the Financial Times has confirmed.

In an interview with CBS’s 60 Minutes, broadcast at the weekend, Dave Clark, Amazon’s head of operations, declined to share a total count, arguing it was “not a particularly useful number”.

“Our rates of infection are at or below the rates of the communities where we operate,” said Kristen Kish, an Amazon spokeswoman. “We see that in our quarantine rates as well. Quarantine rates are a critical part to understanding what’s happening in the workplace — it shows that our hard work around social distancing is paying off.”

She added: “We alert every person at the site anytime there is a confirmed diagnosis. This alert to employees is a direct text message noting when the person with the confirmed diagnosis was last in the building — even if it’s been a month or more.”

In lieu of an official count, workers’ rights groups have tried to crowdsource a total, based on the text messages and voicemails received by employees. One such estimate suggests the number of infected could be more than 500 across the US. Amazon would not comment on the crowdsourced numbers.

Lawmakers in Washington may soon get the chance to put these questions to Jeff Bezos, Amazon’s chief executive. The House judiciary committee, specifically its subcommittee investigating antitrust, last week demanded Mr Bezos appear to answer claims his company has gained an unfair competitive advantage, by using the data it collects on third-party sellers to further its own product development — allegations Amazon has denied.

As with previous congressional hearings involving tech leaders, such as Facebook chief Mark Zuckerberg’s multiple appearances in 2018 and 2019, the topic will almost certainly veer from the stated agenda.

As of Wednesday, a spokesman for David Cicilline, who chairs the antitrust committee, said Mr Bezos had not yet responded to the committee’s demand letter, and Amazon declined to say whether Mr Bezos intended to voluntarily appear before the committee.

The committee has signalled it will use a subpoena if necessary.

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