AMZN Amazon.com Inc

By Dana Mattioli and Sebastian Herrera 

On a mid-March midnight shift, one of Kristy Granados's co-workers coughed and said he felt nauseated.

As he took a break, workers at the Amazon.com Inc. warehouse in Charlotte, N.C., shared worries that they could catch the coronavirus, Ms. Granados said. Most didn't have masks or supplies to disinfect workstations, even as cleaning products streamed past them on conveyor belts. On some recent days, about half the workers hadn't even shown up, she said.

Her co-worker soon returned to his station, and Ms. Granados continued preparing packages, concerned but also mindful her work was likely essential for the millions of people who had turned to online shopping for groceries and thermometers. She never found out what was ailing him.

"We're playing a vital role to get people the supplies they need, whether it's the elderly or people with health issues," said Ms. Granados, who is 41 years old. "A lot of people are depending on us."

The coronavirus is pulling Amazon, America's largest online retailer, in many directions. Chief Executive Jeff Bezos is counting on front-line workers like Ms. Granados to bring essential goods to millions of homebound Americans. So far, it has been a bumpy ride.

Amazon order volumes match those of the holiday season. Usually, the company has months to prepare. Before the pandemic hit, it has had just weeks, and the strain is showing in shortages, delays and worker unrest, including some walkouts, no-shows and Covid-related sickness.

At times, Amazon has had to operate warehouses with half the typical number of workers, according to employees. On Tuesday, employees at Whole Foods Market, a grocer owned by Amazon, organized a "sick out" at its stores and called on management to provide hazard pay and other benefits.

While the coronavirus is straining Amazon's retail operations, it is boosting some of its other businesses. Companies are relying on its cloud-computing arm, Amazon Web Services, as their employees work from home, and customers are streaming home-entertainment content on Amazon Prime.

Earlier in March, Amazon's retail operations moved to rein in sales of counterfeit goods and price-gouging, removing thousands of listings related to face masks and hand sanitizer. As it stepped up policing efforts and removed some sellers from the site, many items were unavailable.

In some areas that have emerged as hot spots for the virus, including San Francisco, Chicago and New York, items such as Lysol disinfecting wipes and office supplies useful for working at home haven't been available or cannot be delivered for a month or longer. Many customers in those areas haven't been able to place grocery orders.

"Leaders across Amazon are meeting every day to consider the evolving situation and are consulting with medical experts to ensure the safety for our sites, employees and customers," an Amazon spokeswoman said via email. She said the company has a unique role to play in getting needed goods to families in a time of social distancing and that the company is "working around the clock to bring on additional capacity to deliver all customer orders."

Amazon has been processing from 10% to 40% more packages than normal for this time of year, according to an employee tally at one delivery center. The company's website had 639,330,722 visits for the week of March 9, according to data from Comscore, up 32% from the year earlier.

From Feb. 20 to March 23, Amazon's sales of toilet paper increased 186% from the year-earlier period, according to analytics firm CommerceIQ, which said that before the coronavirus hit it had forecast a 7% increase for the period. CommerceIQ said sales of cough and cold medicine grew by 862%, compared with a forecast growth rate of 110%, and children's vitamins by 287%, compared with a forecast rate of 49%.

"Our teams are adjusting, rapidly implementing a dizzying array [of] process and policy changes on a daily, and sometimes hourly basis," wrote Dave Clark, Amazon's senior vice president of world-wide operations, in a memo to employees. The company has had to make more than 100 significant changes to human resources and operations over the past few weeks, the memo said.

Senior executives are aware that Amazon's response will shape public opinion about the company for years to come, according to people familiar with their perspectives. That is true both among consumers and in Washington, where antitrust investigations of the company are continuing. Some executives are hopeful that success would lead to greater appreciation of Amazon's vast scale, according to one person who has spoken with executives.

Mr. Bezos is focusing almost exclusively on Amazon's coronavirus response. Although he and President Trump have been frequent antagonists, Mr. Trump has praised the company for keeping deliveries going in a time of need. The company recently announced plans to hire 100,000 new workers in the U.S. to deal with the crisis.

"This isn't business as usual, and it's a time of great stress," Mr. Bezos said in a memo to employees on March 21. "It's also a moment in time when the work we're doing is its most critical." Through a company spokesman, Mr. Bezos and other Amazon executives declined to be interviewed.

Amazon began ramping up for a potential onslaught of orders back in January after seeing indicators of huge demand for some products, according to one retail employee.

After seeing a spike in searches and orders for face masks and health-care products, Amazon began contacting its suppliers to secure more of those goods, the person said. "Some of our suppliers hadn't even heard of this thing then," he said, referring to the coronavirus.

Although Amazon does disaster and business-continuity planning, it didn't model for a pandemic, according to people familiar with the matter. Most of its planning revolved around responding to a major earthquake in Seattle, former executives said. All critical executives at the company carry satellite phones they test every quarter to make sure they could run operations, the former executives said.

As Amazon has moved to prioritize shipments of essential items such as cleaning supplies, face masks and shelf-stable food, it has been hit with a raft of absences at many facilities, according to employees at warehouses around the country.

Employees have tested positive for Covid-19 or been placed in quarantine in at least 15 Amazon locations in the U.S. used for storing, sorting or delivering packages, from California to New York, according to the company. Facilities with at least one confirmed case can be temporarily closed for cleaning and reopen once that process is complete, Amazon said. In states with more stringent guidelines, warehouses can be closed for longer.

Absences have been one reason for delayed shipments. Amazon went from being able to deliver some orders in hours or days to needing weeks for certain in-demand products. Social distancing efforts have contributed to delays, said a person familiar with the matter.

That was an impetus for Amazon's U.S. hiring spree, a figure that would represent a 20% increase in its workforce in the country.

Amazon, which is responsible for more than one-third of e-commerce volumes in the U.S., has long faced complaints from warehouse workers about working conditions and their position in the employee hierarchy. The company, which is the nation's second-largest employer, in recent years has taken steps to boost hourly wages and improve employee-training opportunities.

Now, front-line workers find themselves with more leverage. Facing a daily threat of coronavirus infection at work has galvanized some.

Since the emergence of the coronavirus, workers have pushed for and received a raft of concessions. On March 9, Amazon announced it would relax its time-off policy for warehouse employees, allowing them unlimited unpaid time off that now extends through April.

Two days later, it revised its stance to offer paid sick days to fulfillment center workers possibly infected, and said subsequently that employees who show any symptoms could be eligible for paid sick leave. Amazon raised pay for all employees in fulfillment centers, transportation, stores and deliveries in the U.S. and Canada by $2 an hour through April, bringing its lowest hourly rate to $17 per hour for those employees.

On March 23, Amazon said it granted paid time off to all part-time workers, something warehouse employees across the country had been asking for since last year.

Some company warehouse and delivery employees said such measures were vital to get people simply to come to work.

The company's engineers, data scientists and marketers have been working from home for weeks, and some managers are leading "morale groups," with virtual trivia nights and happy hours.

In the warehouses, employees who ship items to customers, pack them and deliver them across Amazon's warehouse and delivery networks have been navigating increased demand while trying to avoid contracting the virus at work.

Some employees said in interviews that while they recognize the public need, they have concerns about working alongside hundreds of people in relatively close quarters. Some ride shuttles from parking lots to the facilities.

Amazon has secured an additional 450,000 canisters of disinfectant wipes and more than 50,000 hand sanitizers for its warehouse staff, according to a memo reviewed by The Wall Street Journal. Some employees said they have had to bring their own masks because Amazon hasn't been able to secure them yet. Those who have come to work face immense pressure to keep up with demand, workers said.

One employee in King of Prussia, Pa., said that because too many people didn't show up for work, she was responsible for twice as much package-sorting.

On March 19, around 60% of employees at an Amazon Southern California fulfillment center didn't report to work after a colleague showed up earlier in the week with symptoms consistent with an infection, a person familiar with the issue said.

The Amazon spokeswoman said the company is "communicating directly to employees when there is a confirmed case of Covid at their site, and we are consulting with health authorities and medical experts on how to handle building closures for deep cleaning if an employee tests positive."

In Chicago, workers organized and pushed for benefits, including the paid time off for all part-time workers that Amazon eventually granted.

"Everything they've done so far won't prevent us from getting [the virus]," said Ted Miin, who sorts Amazon packages overnight in Chicago and has been involved in leading workers to push for better benefits. "We're working to supply people needed medical supplies and groceries, and a lot of people are relying on Amazon. We recognize the importance. But at the same time, that has to be weighed against the risk."

Maurice Baze, 38, said he believes he is putting his life at risk every time he delivers a package for Amazon in the Baltimore area. Mr. Baze said he is HIV-positive, and he is aware of warnings from health experts that those with compromised immune systems face the highest risks from the coronavirus.

On a recent afternoon, a customer opened her door and put her hands out to receive a package, but Mr. Baze set it on the ground, per Amazon's recommendations to its drivers. He worried that it seemed rude.

"It's a lose-lose," Mr. Baze said. "If I don't go to work, I can't pay my rent. If I do go, I could get sick and never work again because I lost my life."

On March 18, Jenna Bailey, 36, was processing a return for medical masks at a facility in Lexington, Ky., when she noticed a note from a customer explaining the reason for a return. The customer wrote about ordering more masks than intended, including a comment to thank Amazon "for everything you're doing."

Ms. Bailey's eyes welled up as she thought about one of her brothers, who is worried about losing his job.

"I'm very grateful" for having work, she said. "But I'm also very scared."

Write to Dana Mattioli at dana.mattioli@wsj.com and Sebastian Herrera at Sebastian.Herrera@wsj.com

(END) Dow Jones Newswires

March 31, 2020 10:44 ET (14:44 GMT)

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