Amazon to retrain a third of its US workforce

Amazon.com Inc. plans to spend $700 million to retrain a third of its U.S. workforce, as technology threatens to upend the way many of its employees do their jobs.

The company announced Thursday that it will retrain 100,000 workers by 2025 by expanding existing training programs and rolling out new ones meant to help its employees move into more advanced jobs inside the company or find new careers outside of it. The training is voluntary, and most of the programs are free to employees, the company said.

“Technology is changing our society, and it’s certainly changing work,” said Jeff Wilke, chief executive of Amazon’s world-wide consumer business, adding that the initiative is meant to help workers “be prepared for the opportunities of the future.”

For example, hourly workers in fulfillment centers can retrain for IT support roles, such as managing the machines that operate throughout the facilities. Meanwhile, nontechnical corporate workers can spend several years retraining as software engineers without going back to college.

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A worker assembles a box for delivery at the Amazon fulfillment center in Baltimore, Maryland, U.S., April 30, 2019.

A worker assembles a box for delivery at the Amazon fulfillment center in Baltimore, Maryland, U.S., April 30, 2019. (Reuters)

Amazon’s effort to upgrade the skills of its workforce is among the biggest corporate retraining initiatives announced, and breaks down to roughly $7,000 per worker.

At a time of historically low unemployment, coupled with rapid digital transformation that requires high-tech job skills, more U.S. companies want to help existing employees transition to new roles. A challenge facing many corporate retraining efforts is that employers often struggle to predict which skills they will need even a few years in advance.

“The game of picking winners means you often pick losers,” said Jeff Strohl, director of research at the Georgetown University Center on Education and the Workforce.

Amazon, like many corporations, has struggled to find an adequate number of technical employees, and the company is confident that more of its jobs will include a technical component in the future, Mr. Wilke said. The company has more than 20,000 open jobs in the U.S., more than half of them in Seattle.

Amazon has been criticized for its treatment of workers in recent years from labor groups and lawmakers such as independent Vermont Sen. Bernie Sanders, a Democratic presidential candidate, who in March tweeted that the company must “significantly improve working conditions at its warehouses” and respect workers’ rights to form a union.

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Amazon says it has made a series of moves in recent years to improve workers’ compensation and access to educational opportunities. Last year, the company raised the minimum wage it pays its U.S. employees to $15 an hour. The company had 630,600 full-time and part-time employees world-wide in the quarter ended March 31. It has about 275,000 full-time U.S. employees.

Some of the programs offered by Amazon include more advanced training, such as its Machine Learning University, which will be open to thousands of software engineers with computer-science backgrounds to take graduate-level machine-learning skills courses without going back to college. Amazon employees, some of whom are former university professors, will teach the classes.

The training programs could help Amazon workers find jobs in different industries, the company said. The company is expanding a program for fulfillment-center employees called Amazon Career Choice. It pays 95% of an employee’s tuition and fees for certificates and degrees in high-demand fields such as nursing and aircraft mechanics, even though Amazon doesn’t offer employment in those fields. The company expects to open 15 new career-choice classrooms by 2020, as new fulfillment centers open.

None of Amazon’s training will carry a stipulation that employees remain with the company. But workforce experts say retraining efforts don’t always work because not everybody has the capacity or will to transform themselves to fit into a new role. Those who have studied training efforts say that reskilling can boost employee morale and keep workers from leaving a company. The ability to retain talent is important because recruiting new workers and training them is expensive and time-consuming, said Chris O’Leary, a senior economist at the W.E. Upjohn Institute for Employment Research, a nonprofit research center.

“If you can maintain stability, you’re lowering your cost,” he said.

Click here to read more at The Wall Street Journal, where this story was first published.