Amazon’s US$700mil training pledge is actually a bargain

  • TECH
  • Monday, 15 Jul 2019

FILE - In this Dec. 20, 2017, file photo, a clerk reaches to a shelf to pick an item for a customer order at the Amazon Prime warehouse, in New York. Amazon says it is boosting the price of its monthly Prime membership fees for new and existing members by nearly 20 percent. The online retailer says its annual membership fee of $99 will not change. (AP Photo/Mark Lennihan, File) Inc is amazing at turning mundane corporate management decisions into global news events. 

Many retailers host annual sale events. But Amazon “celebrates” Prime Day. Many chief executives write notes to their shareholders. But Jeff Bezos pens annual letters with “lessons” and “principle themes” and “important words” to behold. Many companies open satellite offices. Amazon “launched” HQ2 with a continent-wide pitch contest. And many companies train their employees. On July 11, Amazon announced how much it’s spending on workplace training over the next six years: more than US$700mil (RM2.87bil). 

Certainly, when a company has a market value near US$1tril (RM4.14tril) and a workforce of more than 600,000, each move is a bigger deal than a back-to-school sale at an independent bookstore. Yet, even among its technology industry peers, the e-commerce giant seems to have a magic touch, turning run-of-the-mill corporate events into big moments. 

As of last year, Google quietly amassed more than 7,000 employees in New York. But when Amazon said it was coming to town, the world was transfixed. And when it abandoned those plans, the governor scrambled. After all the fuss, Amazon ended up sending some workers to New York anyway. 

I told you almost two years ago about how Amazon was turning its earnings calls into marketing events and how it deftly used Whole Foods as an opportunity to highlight Amazon’s low, low prices. The company has marketing down pat. That’s not to say Amazon is all talk. The company did raise its minimum pay to US$15 (RM62) an hour last year. That’s real. And surely Amazon will work to retrain its US employees. 

But let’s break down the numbers of this training programme. Amazon said it’ll spend about US$700mil (RM2.87bil) on development for 100,000 employees by 2025. That’s US$1,077 (RM4,429) a person annually. According to one estimate from the Association for Talent Development, a trade group, the average organisation spends US$1,296 (RM5,330) per employee annually on training. Well, you’ve got to admire Amazon’s commitment to undercutting the competition. 

Amazon is a humongous corporation. Training lots of people costs a great deal of money. In a world increasingly worried about monopolies, there’s a curious element to a company seeking praise just for being big. 

Bezos isn’t the first technology idol to entrance the world. Steve Jobs was famous for creating a so-called reality distortion field at Apple. Bill Gates recently described his old foe in mystical terms, saying “casting spells” was part of Jobs’s aura. “I would see people mesmerised,” Gates said. “But because I’m a minor wizard, the spells don’t work on me.” 

We should all aspire to be minor wizards when it comes to corporate pronouncements. Some claims, like ubiquitous drone delivery by 2018, will fail to materialise. Others are less impressive when you see how the magic trick is performed. – Bloomberg

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