Reputation Management at Amazon: The Good, the Bad, and the Ugly

Last week, online retail behemoth Amazon received the kind of PR boost that any brand outside the Republican Party would kill for: President Obama visited its massive Chattanooga warehouse and used his media megaphone to promote the company for creating jobs fit for every politician’s favorite fallback character: the “middle class” American. This is all well and good, but Amazon’s recent reputation management challenges are far more complicated...and less complimentary. The real purpose of the President’s visit was to propose a bargain between the two political parties in which he would trade a cut in corporate tax rates for increased government investment in “education, training, and public works projects” designed to facilitate the creation of those precious middle class jobs. The event unsurprisingly attracted critiques of both the company and the President that highlight their unique PR struggles. It’s true that Amazon's planned hiring wave will create as many as 7,000 American jobs, but Obama's visit raised several questions that the company would rather not address: Are these jobs truly “middle class?” Is Amazon the sort of company that will help strengthen the American economy at large? Will this PR stunt facilitate any truly meaningful political activity? That's easy: no, no, and...no. Now for the ugly: Labor groups decried low wages and conditions in “fulfillment center” jobs, which both advocates and workers have called “physically grueling and mentally stressful”; some even referred to the centers as “sweatshops.” How accurate is this inflammatory rhetoric? Well, most staff members work for $11 an hour with very little job security, walking up to “10 miles a day” to retrieve items from the centers’ shelves under conditions that former employees claim do not include sufficient air conditioning. We would mention that these jobs pay well above the national minimum wage, but there's more negative news: In 2011, employees sued Amazon, explaining to the Huffington Post that they had to wait in warehouse security checkpoints for nearly 30 minutes without pay after each shift so managers could make sure they weren’t stealing merchandise. The perception that these jobs aren't so great won’t stop people from shopping at Amazon, but it is a significant concern in terms of corporate reputation—and recent reports that the company plans to begin using robots to perform some of its warehouse operations probably won’t go over too well with the public. Circumstances are more dramatic in Europe. Employees at a warehouse in Germany (Amazon’s second largest market) staged strikes protesting the company’s hostility to organized labor and, more specifically, its refusal to meet their salary demands. Reps insist that, because Amazon classifies these workers as “warehouse” rather than “retail,” it should not have to pay the higher wages that European Union laws require for the latter group. The President got his share of bad press too: The American Booksellers Association, which might seem to be a natural ally, criticized him for praising a company that they've accused of strangling their industry by setting price standards so low that publishers and bookstores (which employ far more Americans than Amazon ever will) simply can’t compete. In a letter, they wrote that the company's practices actually “cost the U.S. economy more than 42,000 retail jobs just last year.” The purpose of Amazon’s new hiring wave is clearly to win positive press, not to increase its bottom line. But will the good news outweigh the bad? Right now, the response looks a lot like a two-star review. *Photo via whitehouse.gov

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Reputation Management at Amazon: The Good, the Bad, and the Ugly

Patrick Coffee

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