Cities want Amazon's HQ2 jobs, but what about its culture?

Investigations by major news outlets have painted a bleak picture of life for some blue- and white-collar employees at Amazon, but that's not deterring cities from rolling out the welcome mat for the company's proposed second headquarters.

Reports of unhappy employees not deterring governments from bidding to woo retail giant

An Amazon.com employee grabs boxes off the conveyor belt to load onto truck at their Fernley, Nev., warehouse. Media investigations have raised concerns about how the company treats both blue- and white-collar employees. (Scott Sady/Associated Press)

If cities could use Amazon's one-click ordering to snap up the company's second headquarters, they would surely have done so already.

Hours after the U.S.-based online retail giant announced its search for a North American city to host "HQ2," politicians across the continent began mobilizing to put together bids. Among them are the mayors of at least seven major cities in Canada, including Ottawa.

Their eagerness was predictable: Amazon has said the winning host can expect to see 50,000 full-time jobs over the next 15 years, each earning an average pay of more than $100,000 US a year. 

Ontario premier Kathleen Wynne has tapped former bank executive Ed Clark to lead a task force to land the project somewhere in the province.

Ottawa Mayor Jim Watson announced last week he was striking a task force to build this city's bid, and on Thursday said he's leading a trade mission to Seattle, where he'll tour Amazon's original campus to "see what Amazon needs and what they will be looking to achieve with their second headquarters."

But recent news reports about working conditions at Amazon suggest employees might pay a hefty personal price for those lucrative benefits the company is promising its suitors.

Ed Clark, left, business adviser to Ontario Premier Kathleen Wynne, right, has been named as head of a group tasked with guiding the province's bid to become the home of Amazon's second corporate headquarters. (Marta Iwanek/The Canadian Press)

Mistreatment alleged at warehouses

Investigations paint a picture of a company that drives both its blue- and white-collar workers hard. Some say too hard.

An award-winning investigation by Pennsylvania news outlet The Morning Callin 2011 told of workers at the company's Lehigh Valley warehouse toiling in temperatures above 38 C. It said the company stationed paramedics and ambulances outside during heat waves. 

The Morning Call reported the following spring that Amazon had installed air-conditioning and spent a total of $52 million to cool its warehouses across the country.

More recently, Amazon has come under fire in Scotland after it was alleged that warehouse workers were penalized for taking sick days and, in some cases, camped outside the building in winter to save money on their commute. Other reports have focused on the working conditions of Amazon delivery drivers.

Jeff Bezos, CEO of Amazon, rejected The New York Times's characterization of working conditions at the company. (Joshua Roberts/Reuters)

Crushing workloads

The New York Times likely made the biggest splash in August 2015 with its account of life for the white-collar workers at Amazon's Seattle headquarters.

Ex-employees described extreme workloads and pressure to respond to e-mails at all hours. More troubling were reports of how people with health problems were treated. The story described a woman with breast cancer and another who'd had a stillborn child being put on "performance improvement" plans. 

The Times also described an internal communications tool that appeared to encourage Amazon employees to inform on one another in an effort to get ahead.

One former manager told the Times: "Amazon is OK with moving through a lot of people to identify and retain superstars." A former executive called it "purposeful Darwinism," and gave the management method credit for Amazon's success.

Amazon responds

Amazon CEO Jeff Bezos responded to the accusations with a letter to employees, writing: "The article doesn't describe the Amazon I know or the caring Amazonians I work with every day," and encouraging workers to report abuse to the company's human resources department.

Amazon declined a request for an interview with CBC, but noted in an email that the Times article was published two years ago. It directed CBC to a response written by an Amazon executive, which claimed one of the former employees the newspaper had relied on for its information had left the company following a fraud investigation. Amazon also pointed CBC to the review of the story by the newspaper's own public editor.

The company also provided some details about employee perks.

"We have more than 380,000 employees worldwide and all of them — from our hourly associates to our most senior executives — have access to the same generous health benefits and parental leave," the company said.

Ontario Federation of Labour president Chris Buckley said 50,000 new jobs from Amazon would be wonderful news for Ontario, but workers must be treated fairly. (Mike Crawley/CBC)

'Respect and dignity'

The Ontario Federation of Labour said it would welcome 50,000 new jobs to a province that's lost hundreds of thousands over the last several years. "But they have to be decent jobs," said the federation's president, Chris Buckley.

"We have to have an assurance that these workers, if they set up shop in Ontario, are treated with respect and dignity and most importantly, treated fairly," Buckley said.

As it seeks to entice big players like Amazon, Ontario's Liberal government has also made improving conditions for workers a centrepiece of its current mandate. Its Fair Workplaces, Better Jobs Act, which would increase the minimum wage to 15 dollars an hour among other changes, is now being debated at Queen's Park.

But even Ontario's current labour laws would better protect Amazon workers than those in place in the U.S., according to Michael Lynk, an associate professor of law at Western University.

Lynk had this advice for governments making bids:

"Be careful about wanting to make promises with respect to loosening our employment standards or our labour standards," Lynk said. "They're one of the biggest guarantees we have that there is some form of broader social equality in any society."

The law doesn't protect employees from bosses demanding late-night answers to emails, however. Buckley argued the best way for the government to help a future Amazon workforce — and other Ontarians — would be to make it easier for them to unionize.

Wooing non-union jobs

Many experts predict the winning bid for Amazon's second headquarters will have to include financial incentives.

But in Canada, governments have more typically used such incentives to lure stable, unionized jobs such as those in the auto sector, according to Tyler Chamberlin, an associate professor at the University of Ottawa's Telfer School of Management.

That's not what Ontario would be getting with Amazon. The company is also "working aggressively to automate many of its activities," he said, which could bode ill for its workforce down the line.

Governments should resist tripping over each other to offer Amazon incentives, Chamberlin said, and should instead ask questions about what kinds of jobs the company is planning to bring to the host city. 

He's skeptical that Amzon's HQ2 will be a parallel power centre filled with workers earning top dollar.

"I don't know of any other example of a firm in technology that has done this," he said. "No matter how quickly they've grown, no matter how big they got, you think of Apple, you think of Microsoft, they've never really established a second headquarters and staffed it with high-quality jobs."

Amazon maintains the new jobs will be similar to those at the firm's head office in Seattle.

'In a meritocracy, you're expected to work hard'

A proponent of Ottawa's bid said he has no misgivings about either the quality of jobs in play, or about enticing Amazon's corporate culture to Canada.

"Fortune 500, and especially Amazon, is going at breakneck speed," said Blair Patacairk, managing director of investment and trade at Invest Ottawa. "Being a Fortune 500 and going that fast, I can understand why you can be missing a bit of the winning culture piece of it."
Blair Patacairk, director of investment and trade at Invest Ottawa. (Invest Ottawa)

Exposure like the story in The New York Times, he said, "will force change internally. I'll bet you any money they've got a task force on this right now."

CEO Jeff Bezos's letter to shareholders in April 2016 hinted at the thinking going on inside the company. 

"A word about corporate cultures: for better or for worse, they are enduring, stable, hard to change," he wrote. "They can be a source of advantage or disadvantage."

Amazon is far from the only successful technology company to drive its employees hard, Patacairk said. Dell, where he worked for two years as a director of communications for the company's Canadian arm, was powered by "Dellionaires" — staff at all levels who worked crazy hours for piles of money. 

"In a meritocracy, you're expected to work hard. And you get paid for working hard," he said.

About two years of Dell's meritocracy proved enough for Patacairk despite the temptation of ever-growing paycheques.

"We had two little kids at home, and we had a very busy family life, and I wasn't around that much when I was younger working those kinds of hours," he said. "It was tough."