Chapter 1: What is the main topic discussed in this episode?
This is Andrew Ross Sorkin, the founder of Dealbook. Every year, I interview some of the world's most influential leaders across politics, culture, and business at the Dealbook Summit, a live event in New York City. On this year's podcast, you'll hear my unfiltered conversations with Gavin Newsom, the CEO of Palantir and Anthropic, and Erica Kirk, the widow of Charlie Kirk.
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From The New York Times, I'm Natalie Kitro-Eff. This is The Daily. As the labor market cools and artificial intelligence booms, many workers are worrying about what their place will be in a changing economy.
Chapter 2: What are Amazon's plans for replacing jobs with robots?
My colleague Karen Wise got her hands on internal strategy documents from Amazon that offer a glimpse into that future. In them, she found that the nation's second largest employer plans to replace hundreds of thousands of jobs with robots. Today, Karen walks me through Amazon's ambitious plans and what they could mean for the American workforce. It's Monday, November 3rd.
Karen, you know, as well as anyone, that we have been hearing for a very long time that robots are going to be coming for our jobs, especially at companies like Amazon. But you've been reporting on how that moment that we've all been anticipating is finally here. So tell us what you found.
Yeah, so I've been looking into this because covering the company for as long as I've had, I saw this huge growth in their headcount and the number of employees they had. And then in the past few years, it started essentially plateauing. So you could tell something was starting to happen behind the scenes.
But I didn't realize how much progress they had made until I got my hands on some internal documents. And these are the internal strategy documents for the robotics automation team. It documents sign-offs at the most senior level of the company. And it really showed the breadth of the ambition that they have, the progress that they see.
And what I found in these documents is that they have plans to avoid hiring more than half a million workers because of using robots. And big picture, their long-term goal is to automate 75% of their operations.
That is just remarkable. Amazon is planning for a world where only a quarter of its operations, you're saying, are done by humans.
And it's a really big deal because Amazon's the second biggest private employer in the country. And they're also just seen as kind of a leader, a flagship employer in the country that really shapes where jobs are heading. And so I knew that if they were making this progress, other companies would follow. You're saying this matters far beyond Amazon. Exactly, yeah.
They are kind of a signature employer of this kind of hourly workforce. So it's a really big deal much beyond them. How fast will this happen? That's a vision for 2033, but that is only with the advancements they currently have and NOAA. So there's an expectation that it could even kind of improve over time.
Okay, so we're talking about massive change here. But Karen, we know, right, that Amazon has been automating for a while now. So what's different about this moment?
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Chapter 3: How has Amazon's workforce changed over the years?
But what happened is they became this enormous employer. In 2018, they had fewer than 400,000 U.S. employees to more than a million in just a couple years. So they became so big, it became expensive and hard to keep that many people cycling through their buildings.
And so you see a focus now on not augmenting workers, but actually avoiding hiring people so that you are actually ultimately trying to bring down the total number of people that you have. And the other thing that changed is These investments in technology they've been making over the years began clicking. You know, it takes several years to develop strong robotic systems that actually work.
And they've reached a point where they feel like these different systems are working, they're working together, and they can begin rolling them out at scale.
And how much does this advancement with the robots have to do with AI? Like, is AI driving that?
Yeah, it does have to do with the robots because they are getting more sophisticated and more capable because of AI. But it also has to do with the desire to cut costs because Amazon is spending so much money building AI, building data centers, you know, hundreds of billions of dollars. And so they need cash. Got it.
So you're saying basically what's different now is that Amazon has the capacity, actually, to replace people en masse because this technology has evolved so much, partly thanks to AI. And it has the need to do so in a much more urgent way than it ever has before, also partly because of its investment in AI. That's exactly right.
So essentially, it now makes more business sense for the company to invest in robots than in hiring more people. It's become cost effective. That does seem like a moment to mark. It also seems important just to understand how Amazon got here, how its workforce became so large that it finds itself in this position. Tell me about that. Yeah.
So if you go back even to 2012, at the time they had a handful of warehouses around the country. They started with books, obviously, and moved into CDs. And so they had a growing variety of products. And Amazon, they have this idea that drives everything, that consumers always want things faster, they want them cheaper, and they want bigger selection.
And so they start focusing on these three things, and all of those end up coming back to the warehouses because they need space to be able to sell things and hold the inventory, particularly when they started letting merchants sell products on their website. Delivering things quickly, that's all about how fast they can fulfill the orders and get them to customers.
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Chapter 4: What is the significance of Amazon's automation strategy?
Mm-hmm.
They start opening warehouses closer to pretty much every major city. And all of that creates more jobs and more work because people are buying more from Amazon.
And how exactly at this point are robots fitting into this, what sounds like a very successful push toward more and more efficiency, faster and faster delivery times?
The biggest investment was in 2012. They bought a company called Kiva. And what Kiva did is these little robots that are like a large hockey puck, and they pick up towers of inventory, and they move them to a worker. And it cut out a lot of the walking in a warehouse. You used to walk back and forth across all the aisles to pick the products. And that's
annoying work for a lot of people, it's exhausting, and also it's very slow and time-consuming. And so by bringing the products to the people, to the pickers, they could start getting a much higher efficiency out of the labor force.
So at this point, early on, the effect of automation is to make this delivery process as fast as possible. Again, to just increase the volume of sales, to help with what you call that flywheel.
That's exactly right. And ultimately, it works. And all of a sudden, you have a company that has become a major force, a transformative force in the whole warehousing industry and delivery industry. And they basically create it in many ways. It transforms consumer expectations and it transforms business.
Retailing and e-commerce broadly, it's the default way people come to shop is they know that Amazon can get it quickly and that Amazon will get it to them when they say they can. It becomes very dependable and it becomes this consumer behavior that is entwined with how so many people shop.
And at the same time, you have Amazon adding and adding to its workforce to make that change possible. That's exactly right.
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Chapter 5: How does AI influence Amazon's robotics and automation?
I remember talking to labor economists at the time. So it was just this massive growth. And by 2021, they had more than 1.1 million workers in the United States. And some of those are absolutely corporate employees and technology employees, but the heart of that is the warehouse labor force. And the cost of labor got very high.
And they started reaching a point where they were basically not profiting because of all of this labor expense and inefficiencies in their operations.
Basically, this is the point where Amazon hits the wall, right? Where very quickly they find themselves with a much bigger workforce that not only was very costly, but actually was starting to affect their bottom line.
How do they respond? So in this period, Amazon gets a new CEO. Jeff Bezos becomes executive chairman, and Andy Jassy, who had run the very profitable cloud computing unit, now runs all of Amazon. And he starts focusing very intently on cutting costs. And part of that was really trying to look at how can they advance automation further.
And the automation and robotics team sets this ambitious goal to not just augment the work that workers are doing, but to replace them. And that plan is not hypothetical. I mean, it is happening now and it is being rolled out around the country.
We'll be right back.
Hi, I'm Ivan Penn. I'm an energy reporter for The New York Times. I think a lot of people take electricity for granted, but it's an essential piece of some of the biggest stories right now. The rise of artificial intelligence, the threat of climate change, and the real challenges that everyday people are facing with increasing electric bills.
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Chapter 6: What does the future of Amazon's warehouses look like?
And, you know, Amazon says those numbers are tentative, nothing's final. But the reason you do this is to reduce your need for labor.
You're saying Amazon is going to need far fewer people maintaining robots than it's going to need packers, pickers on the warehouse floor. That's exactly right. Yeah.
I should note that Amazon isn't disputing this reporting. There's kind of two main things they have to say. One is that they say the goals of the automation team don't represent all of the goals of the company.
And so while, yes, they may be focusing on efficiency here, there might be other parts of the business, including in their warehousing operation, that they might grow as they make more investments in the future. Hmm. And an example they pointed to is they've been building more delivery stations in areas that are more remote and have a smaller population.
And so those are new jobs in places that didn't have them and letting customers in more rural areas get faster deliveries. The other thing they say is that they're very focused on the new jobs that are being created because of automation and robotics. And there's a type of role that's essentially a technician or a mechanic that works with the robots. And they do everything from maintenance.
They do repairs. They handle what are called exceptions. Like if the robot drops something, they are able to safely go and to deal with all of that. And so those jobs pay more. And they have more of a career path than a traditional Amazon warehouse job does.
The main issue is that there just aren't as many of them when you compare it to the number of regular hourly worker jobs that won't be needed.
But it's worth considering some of the business realities, at least as Amazon sees them, right? I mean, this company wants to keep growing, to keep beating its competitors. And in the past, the way that it's done that is by hiring a ton of people. And after a certain point, the company has found that just doesn't work. It becomes really difficult and expensive.
So if Amazon wants to keep growing and keep its customers happy, this is a company that's attempting to solve the very real problems in its model.
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Chapter 7: How is Amazon's automation impacting job availability?
I think we should do something about denuclearization. And I did actually discuss that with both President Putin and President Xi. We have enough nuclear weapons to blow up the world 150 times.
Trump said that he'd discussed denuclearization with Russian President Vladimir Putin and Chinese President Xi Jinping. But he also claimed, without offering evidence, that both countries are conducting nuclear tests and said he didn't want to be the only country not doing so.
Are we going to war against Venezuela? I doubt it. I don't think so, but they've been treating us very badly, not only on drugs,
Trump said that he doubted that the U.S. military buildup in the Caribbean would lead to war in Venezuela, but also said he thought that Venezuelan President Nicolas Maduro's days were numbered.
Can you set the record straight you're not going to try and run for a third term? Well, I don't even think about it. I will tell you, a lot of people want me to run, but the difference between us and the Democrats is we really do have a strong bench.
Asked to clarify whether he would try to run for a third term, Trump said he didn't think about doing so, even though he's repeatedly mused about the prospect. He touted potential Republican successors, including his vice president, J.D. Vance, and Secretary of State Marco Rubio. Today's episode was produced by Diana Nguyen, Rob Zipko, Stella Tan, Ricky Nowetzki, and Jessica Chung.
It was edited by Mark George and Brendan Klinkenberg, with help from Michael Benoit. Contains music by Dan Powell, Diane Wong, Pat McCusker, and Marion Lozano, and was engineered by Chris Wood. That's it for The Daily. I'm Natalie Kittroweth. See you tomorrow.
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