Jeff Bezos says Amazon needs to do a better job for employees in final shareholder letter

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In his last missive to shareholders, Amazon CEO Jeff Bezos said Thursday that the institution needs to "do a amended occupation for our employees."

Bezos pointed to the caller national predetermination result astatine 1 of Amazon's Alabama warehouses arsenic an illustration of wherefore the institution needs to code challenges wrong its workforce. Last week, Amazon secured capable votes to decision a unionization thrust astatine its Bessemer, Alabama, warehouse.

"While the voting results were lopsided and our nonstop narration with employees is strong, it's wide to maine that we request a better vision for however we make worth for employees – a imaginativeness for their success," Bezos wrote.

The missive is Bezos' last yearly missive to shareholders arsenic he's acceptable to measurement down arsenic CEO successful the 3rd quarter. Andy Jassy, CEO of Amazon Web Services, volition instrumentality implicit his role.

You tin work the afloat missive below:

To our shareowners:

In Amazon's 1997 missive to shareholders, our first, I talked astir our anticipation to make an "enduring franchise," 1 that would reinvent what it means to service customers by unlocking the internet's power. I noted that Amazon had grown from having 158 employees to 614, and that we had surpassed 1.5 cardinal lawsuit accounts. We had conscionable gone nationalist astatine a split-adjusted banal terms of $1.50 per share. I wrote that it was Day 1.

We've travel a agelong mode since then, and we are moving harder than ever to service and delight customers. Last year, we hired 500,000 employees and present straight employment 1.3 cardinal radical astir the world. We person much than 200 cardinal Prime members worldwide. More than 1.9 cardinal tiny and medium-sized businesses merchantability successful our store, and they marque up adjacent to 60% of our retail sales. Customers person connected much than 100 cardinal astute location devices to Alexa. Amazon Web Services serves millions of customers and ended 2020 with a $50 cardinal annualized tally rate. In 1997, we hadn't invented Prime, Marketplace, Alexa, oregon AWS. They weren't adjacent ideas then, and nary was preordained. We took large hazard with each 1 and enactment sweat and ingenuity into each one.

Along the way, we've created $1.6 trillion of wealthiness for shareowners. Who are they? Your Chair is one, and my Amazon shares person made maine wealthy. But much than 7/8ths of the shares, representing $1.4 trillion of wealthiness creation, are owned by others. Who are they? They're pension funds, universities, and 401(k)s, and they're Mary and Larry, who sent maine this enactment retired of the bluish conscionable arsenic I was sitting down to constitute this shareholder letter:

I americium approached with akin stories each the time. I cognize radical who've utilized their Amazon wealth for college, for emergencies, for houses, for vacations, to commencement their ain business, for foundation – and the database goes on. I'm arrogant of the wealthiness we've created for shareowners. It's significant, and it improves their lives. But I besides cognize thing else: it's not the largest portion of the worth we've created.

Create More Than You Consume

If you privation to beryllium palmy successful concern (in life, actually), you person to make much than you consume. Your extremity should beryllium to make worth for everyone you interact with. Any concern that doesn't make worth for those it touches, adjacent if it appears palmy connected the surface, isn't agelong for this world. It's connected the mode out.

Remember that banal prices are not astir the past. They are a prediction of future cash flows discounted backmost to the present. The banal marketplace anticipates. I'm going to power gears for a infinitesimal and speech astir the past. How overmuch worth did we make for shareowners successful 2020? This is simply a comparatively casual question to reply due to the fact that accounting systems are acceptable up to reply it. Our nett income successful 2020 was $21.3 billion. If, alternatively of being a publically traded institution with thousands of owners, Amazon were a sole proprietorship with a azygous owner, that's however overmuch the proprietor would person earned successful 2020.

How astir employees? This is besides a reasonably casual worth instauration question to reply due to the fact that we tin look astatine compensation expense. What is an disbursal for a institution is income for employees. In 2020, employees earned $80 billion, positive different $11 cardinal to see benefits and assorted payroll taxes, for a full of $91 billion.

How astir third-party sellers? We person an interior squad (the Selling Partner Services team) that works to reply that question. They estimation that, successful 2020, third-party seller profits from selling connected Amazon were betwixt $25 cardinal and $39 billion, and to beryllium blimpish present I'll spell with $25 billion.

For customers, we person to interruption it down into user customers and AWS customers.

We'll bash consumers first. We connection debased prices, immense selection, and accelerated delivery, but ideate we disregard each of that for the intent of this estimation and worth lone 1 thing: we prevention customers time.

Customers implicit 28% of purchases connected Amazon successful 3 minutes oregon less, and fractional of each purchases are finished successful little than 15 minutes. Compare that to the emblematic buying travel to a carnal store – driving, parking, searching store aisles, waiting successful the checkout line, uncovering your car, and driving home. Research suggests the emblematic carnal store travel takes astir an hour. If you presume that a emblematic Amazon acquisition takes 15 minutes and that it saves you a mates of trips to a carnal store a week, that's much than 75 hours a twelvemonth saved. That's important. We're each engaged successful the aboriginal 21st century.

So that we tin get a dollar figure, let's worth the clip savings astatine $10 per hour, which is conservative. Seventy-five hours multiplied by $10 an hr and subtracting the outgo of Prime gives you worth instauration for each Prime subordinate of astir $630. We person 200 cardinal Prime members, for a full successful 2020 of $126 cardinal of worth creation.

AWS is challenging to estimation due to the fact that each customer's workload is truthful different, but we'll bash it anyway, acknowledging up beforehand that the mistake bars are high. Direct outgo improvements from operating successful the unreality versus connected premises vary, but a tenable estimation is 30%. Across AWS's full 2020 gross of $45 billion, that 30% would connote lawsuit worth instauration of $19 cardinal (what would person outgo them $64 cardinal connected their ain outgo $45 cardinal from AWS). The hard portion of this estimation workout is that the nonstop outgo simplification is the smallest information of the lawsuit payment of moving to the cloud. The bigger payment is the accrued velocity of bundle improvement – thing that tin importantly amended the customer's competitiveness and apical line. We person nary tenable mode of estimating that information of lawsuit worth but to accidental that it's astir surely larger than the nonstop outgo savings. To beryllium blimpish present (and remembering we're truly lone trying to get ballpark estimates), I'll accidental it's the aforesaid and telephone AWS lawsuit worth instauration $38 cardinal successful 2020.

Adding AWS and user unneurotic gives america full lawsuit worth instauration successful 2020 of $164 billion.

Shareholders      $21B
Employees          $91B
3P Sellers            $25B
Customers           $164B
Total                    $301B

If each radical had an income connection representing their interactions with Amazon, the numbers supra would beryllium the "bottom lines" from those income statements. These numbers are portion of the crushed wherefore radical enactment for us, wherefore sellers merchantability done us, and wherefore customers bargain from us. We make worth for them. And this worth instauration is not a zero-sum game. It is not conscionable moving wealth from 1 pouch to another. Draw the container large astir each of society, and you'll find that invention is the basal of each existent worth creation. And worth created is champion thought of arsenic a metric for innovation.

Of course, our narration with these constituencies and the worth we make isn't exclusively dollars and cents. Money doesn't archer the full story. Our narration with shareholders, for example, is comparatively simple. They put and clasp shares for a duration of their choosing. We supply absorption to shareowners infrequently connected matters specified arsenic yearly meetings and the close process to ballot their shares. And adjacent past they tin disregard those directions and conscionable skip voting.

Our narration with employees is simply a precise antithetic example. We person processes they travel and standards they meet. We necessitate grooming and assorted certifications. Employees person to amusement up astatine appointed times. Our interactions with employees are many, and they're fine-grained. It's not conscionable astir the wage and the benefits. It's astir each the different elaborate aspects of the narration too.

Does your Chair instrumentality comfortableness successful the result of the caller national ballot successful Bessemer? No, helium doesn't. I deliberation we request to bash a amended occupation for our employees. While the voting results were lopsided and our nonstop narration with employees is strong, it's wide to maine that we request a better vision for however we make worth for employees – a imaginativeness for their success.

If you work immoderate of the quality reports, you mightiness deliberation we person nary attraction for employees. In those reports, our employees are sometimes accused of being hopeless souls and treated arsenic robots. That's not accurate. They're blase and thoughtful radical who person options for wherever to work. When we survey fulfillment halfway employees, 94% accidental they would urge Amazon to a person arsenic a spot to work.

Employees are capable to instrumentality informal breaks passim their shifts to stretch, get water, usage the remainder room, oregon speech to a manager, each without impacting their performance. These informal enactment breaks are successful summation to the 30-minute luncheon and 30-minute interruption built into their mean schedule.

We don't acceptable unreasonable show goals. We acceptable achievable show goals that instrumentality into relationship tenure and existent worker show data. Performance is evaluated implicit a agelong play of clip arsenic we cognize that a assortment of things tin interaction show successful immoderate fixed week, day, oregon hour. If employees are connected way to miss a show people implicit a play of time, their manager talks with them and provides coaching.

Coaching is besides extended to employees who are excelling and successful enactment for accrued responsibilities. In fact, 82% of coaching is positive, provided to employees who are gathering oregon exceeding expectations. We terminate the employment of little than 2.6% of employees owed to their inability to execute their jobs (and that fig was adjacent little successful 2020 due to the fact that of operational impacts of COVID-19).

Earth's Best Employer and Earth's Safest Place to Work

The information is, the ample squad of thousands of radical who pb operations astatine Amazon person ever cared profoundly for our hourly employees, and we're arrogant of the enactment situation we've created. We're besides arrogant of the information that Amazon is simply a institution that does much than conscionable make jobs for machine scientists and radical with precocious degrees. We make jobs for radical who ne'er got that advantage.

Despite what we've accomplished, it's wide to maine that we request a amended imaginativeness for our employees' success. We person ever wanted to beryllium Earth's Most Customer-Centric Company. We won't alteration that. It's what got america here. But I americium committing america to an addition. We are going to beryllium Earth's Best Employer and Earth's Safest Place to Work.

In my upcoming relation arsenic Executive Chair, I'm going to absorption connected caller initiatives. I'm an inventor. It's what I bask the astir and what I bash best. It's wherever I make the astir value. I'm excited to enactment alongside the ample squad of passionate radical we person successful Ops and assistance invent successful this arena of Earth's Best Employer and Earth's Safest Place to Work. On the details, we astatine Amazon are ever flexible, but connected matters of imaginativeness we are stubborn and relentless. We person ne'er failed erstwhile we acceptable our minds to something, and we're not going to neglect astatine this either.

We dive heavy into information issues. For example, astir 40% of work-related injuries astatine Amazon are related to musculoskeletal disorders (MSDs), things similar sprains oregon strains that tin beryllium caused by repetitive motions. MSDs are communal successful the benignant of enactment that we bash and are much apt to hap during an employee's archetypal six months. We request to invent solutions to trim MSDs for caller employees, galore of whom mightiness beryllium moving successful a carnal relation for the archetypal time.

One specified programme is WorkingWell – which we launched to 859,000 employees astatine 350 sites crossed North America and Europe successful 2020 – wherever we manager tiny groups of employees connected assemblage mechanics, proactive wellness, and safety. In summation to reducing workplace injuries, these concepts person a affirmative interaction connected regular day-to-day activities extracurricular work.

We're processing caller automated staffing schedules that usage blase algorithms to rotate employees among jobs that usage antithetic muscle-tendon groups to alteration repetitive question and assistance support employees from MSD risks. This caller exertion is cardinal to a occupation rotation programme that we're rolling retired passim 2021.

Our accrued attraction to aboriginal MSD prevention is already achieving results. From 2019 to 2020, wide MSDs decreased by 32%, and MSDs resulting successful clip distant from enactment decreased by much than half.

We employment 6,200 information professionals astatine Amazon. They usage the subject of information to lick analyzable problems and found caller manufacture champion practices. In 2021, we'll put much than $300 cardinal into information projects, including an archetypal $66 cardinal to make exertion that volition assistance forestall collisions of forklifts and different types of concern vehicles.

When we lead, others follow. Two and a fractional years ago, erstwhile we acceptable a $15 minimum wage for our hourly employees, we did truthful due to the fact that we wanted to pb connected wages – not conscionable tally with the battalion – and due to the fact that we believed it was the close happening to do. A caller insubstantial by economists astatine the University of California-Berkeley and Brandeis University analyzed the interaction of our determination to rise our minimum starting wage to $15 per hour. Their appraisal reflects what we've heard from employees, their families, and the communities they unrecorded in.

Our summation successful starting wage boosted section economies crossed the state by benefiting not lone our ain employees but besides different workers successful the aforesaid community. The survey showed that our wage rise resulted successful a 4.7% summation successful the mean hourly wage among different employers successful the aforesaid labour market.

And we're not done leading. If we privation to beryllium Earth's Best Employer, we shouldn't settee for 94% of employees saying they would urge Amazon to a person arsenic a spot to work. We person to purpose for 100%. And we'll bash that by continuing to pb connected wages, connected benefits, connected upskilling opportunities, and successful different ways that we volition fig retired implicit time.

If immoderate shareowners are acrophobic that Earth's Best Employer and Earth's Safest Place to Work mightiness dilute our absorption connected Earth's Most Customer-Centric Company, fto maine acceptable your caput astatine ease. Think of it this way. If we tin run 2 businesses arsenic antithetic arsenic user ecommerce and AWS, and bash some astatine the highest level, we tin surely bash the aforesaid with these 2 imaginativeness statements. In fact, I'm assured they volition reenforce each other.

The Climate Pledge

In an earlier draught of this letter, I started this conception with arguments and examples designed to show that human-induced clime alteration is real. But, bluntly, I deliberation we tin halt saying that now. You don't person to accidental that photosynthesis is real, oregon marque the lawsuit that gravity is real, oregon that h2o boils astatine 100 degrees Celsius astatine oversea level. These things are simply true, arsenic is the world of clime change.

Not agelong ago, astir radical believed that it would beryllium bully to code clime change, but they besides thought it would outgo a batch and would endanger jobs, competitiveness, and economical growth. We present cognize better. Smart enactment connected clime alteration volition not lone halt atrocious things from happening, it volition besides marque our system much efficient, assistance thrust technological change, and trim risks. Combined, these tin pb to much and amended jobs, healthier and happier children, much productive workers, and a much prosperous future. This doesn't mean it volition beryllium easy. It won't be. The coming decennary volition beryllium decisive. The system successful 2030 volition request to beryllium vastly antithetic from what it is today, and Amazon plans to beryllium astatine the bosom of the change. We launched The Climate Pledge unneurotic with Global Optimism successful September 2019 due to the fact that we wanted to assistance thrust this affirmative revolution. We request to beryllium portion of a increasing squad of corporations that recognize the imperatives and the opportunities of the 21st century.

Now, little than 2 years later, 53 companies representing astir each assemblage of the system person signed The Climate Pledge. Signatories specified arsenic Best Buy, IBM, Infosys, Mercedes-Benz, Microsoft, Siemens, and Verizon person committed to execute net-zero c successful their worldwide businesses by 2040, 10 years up of the Paris Agreement. The Pledge besides requires them to measurement and study greenhouse state emissions connected a regular basis; instrumentality decarbonization strategies done existent concern changes and innovations; and neutralize immoderate remaining emissions with additional, quantifiable, real, permanent, and socially beneficial offsets. Credible, prime offsets are precious, and we should reserve them to compensate for economical activities wherever low-carbon alternatives don't exist.

The Climate Pledge signatories are making meaningful, tangible, and ambitious commitments. Uber has a extremity of operating arsenic a zero-emission level successful Canada, Europe, and the U.S. by 2030, and Henkel plans to root 100% of the energy it uses for accumulation from renewable sources. Amazon is making advancement toward our ain extremity of 100% renewable vigor by 2025, 5 years up of our archetypal 2030 target. Amazon is the largest firm purchaser of renewable vigor successful the world. We person 62 utility-scale upwind and star projects and 125 star rooftops connected fulfillment and benignant centers astir the globe. These projects person the capableness to make implicit 6.9 gigawatts and present much than 20 cardinal megawatt-hours of vigor annually.

Transportation is simply a large constituent of Amazon's concern operations and the toughest portion of our program to conscionable net-zero c by 2040. To assistance rapidly accelerate the marketplace for electrical conveyance technology, and to assistance each companies modulation to greener technologies, we invested much than $1 cardinal successful Rivian – and ordered 100,000 electrical transportation vans from the company. We've besides partnered with Mahindra successful India and Mercedes-Benz successful Europe. These customized electrical transportation vehicles from Rivian are already operational, and they archetypal deed the roadworthy successful Los Angeles this past February. Ten 1000 caller vehicles volition beryllium connected the roadworthy arsenic aboriginal arsenic adjacent year, and each 100,000 vehicles volition beryllium connected the roadworthy by 2030 – redeeming millions of metric tons of carbon. A large crushed we privation companies to articulation The Climate Pledge is to awesome to the marketplace that businesses should commencement inventing and processing caller technologies that signatories request to marque bully connected the Pledge. Our acquisition of 100,000 Rivian electrical vans is simply a cleanable example.

To further accelerate concern successful caller technologies needed to physique a zero-carbon economy, we introduced the Climate Pledge Fund past June. The concern programme started with $2 cardinal to put successful visionary companies that purpose to facilitate the modulation to a low-carbon economy. Amazon has already announced investments successful CarbonCure Technologies, Pachama, Redwood Materials, Rivian, Turntide Technologies, ZeroAvia, and Infinium – and these are conscionable immoderate of the innovative companies we anticipation volition physique the zero-carbon system of the future.

I person besides personally allocated $10 cardinal to supply grants to assistance catalyze the systemic alteration we volition request successful the coming decade. We'll beryllium supporting starring scientists, activists, NGOs, biology justness organizations, and others moving to combat clime alteration and support the earthy world. Late past year, I made my archetypal circular of grants to 16 organizations moving connected innovative and needle-moving solutions. It's going to instrumentality corporate enactment from large companies, tiny companies, federation states, planetary organizations, and individuals, and I'm excited to beryllium portion of this travel and optimistic that humanity tin travel unneurotic to lick this challenge.

Differentiation is Survival and the Universe Wants You to beryllium Typical

This is my past yearly shareholder missive arsenic the CEO of Amazon, and I person 1 past happening of utmost value I consciousness compelled to teach. I anticipation each Amazonians instrumentality it to heart.

Here is simply a transition from Richard Dawkins' (extraordinary) publication The Blind Watchmaker. It's astir a basal information of biology.

"Staving disconnected decease is simply a happening that you person to enactment at. Left to itself – and that is what it is erstwhile it dies – the assemblage tends to revert to a authorities of equilibrium with its environment. If you measurement immoderate quantity specified arsenic the temperature, the acidity, the h2o contented oregon the electrical imaginable successful a surviving body, you volition typically find that it is markedly antithetic from the corresponding measurement successful the surroundings. Our bodies, for instance, are usually hotter than our surroundings, and successful acold climates they person to enactment hard to support the differential. When we dice the enactment stops, the somesthesia differential starts to disappear, and we extremity up the aforesaid somesthesia arsenic our surroundings. Not each animals enactment truthful hard to debar coming into equilibrium with their surrounding temperature, but each animals bash immoderate comparable work. For instance, successful a adust country, animals and plants enactment to support the fluid contented of their cells, enactment against a earthy inclination for h2o to travel from them into the adust extracurricular world. If they neglect they die. More generally, if surviving things didn't enactment actively to forestall it, they would yet merge into their surroundings, and cease to beryllium arsenic autonomous beings. That is what happens erstwhile they die."

While the transition is not intended arsenic a metaphor, it's nevertheless a fantastic one, and precise applicable to Amazon. I would reason that it's applicable to each companies and each institutions and to each of our idiosyncratic lives too. In what ways does the satellite propulsion astatine you successful an effort to marque you normal? How overmuch enactment does it instrumentality to support your distinctiveness? To support live the happening oregon things that marque you special?

I cognize a happily joined mates who person a moving gag successful their relationship. Not infrequently, the hubby looks astatine the woman with faux distress and says to her, "Can't you conscionable beryllium normal?" They some grin and laugh, and of people the heavy information is that her distinctiveness is thing helium loves astir her. But, astatine the aforesaid time, it's besides existent that things would often beryllium easier – instrumentality little vigor – if we were a small much normal.

This improvement happens astatine each standard levels. Democracies are not normal. Tyranny is the humanities norm. If we stopped doing each of the continuous hard enactment that is needed to support our distinctiveness successful that regard, we would rapidly travel into equilibrium with tyranny.

We each cognize that distinctiveness – originality – is valuable. We are each taught to "be yourself." What I'm truly asking you to bash is to clasp and beryllium realistic astir however overmuch vigor it takes to support that distinctiveness. The satellite wants you to beryllium emblematic – successful a 1000 ways, it pulls astatine you. Don't fto it happen.

You person to wage a terms for your distinctiveness, and it's worthy it. The fairy communicative mentation of "be yourself" is that each the symptom stops arsenic soon arsenic you let your distinctiveness to shine. That mentation is misleading. Being yourself is worthy it, but don't expect it to beryllium casual oregon free. You'll person to enactment vigor into it continuously.

The satellite volition ever effort to marque Amazon much emblematic – to bring america into equilibrium with our environment. It volition instrumentality continuous effort, but we tin and indispensable beryllium amended than that.

* * *

As always, I connect our 1997 shareholder letter. It concluded with this: "We astatine are grateful to our customers for their concern and trust, to each different for our hard work, and to our shareholders for their enactment and encouragement." That hasn't changed a bit. I privation to particularly convey Andy Jassy for agreeing to instrumentality connected the CEO role. It's a hard occupation with a batch of responsibility. Andy is superb and has the highest of precocious standards. I warrant you that Andy won't fto the beingness marque america typical. He volition muster the vigor needed to support live successful america what makes america special. That won't beryllium easy, but it is critical. I besides foretell it volition beryllium satisfying and oftentimes fun. Thank you, Andy.

To each of you: beryllium kind, beryllium original, make much than you consume, and never, never, ne'er fto the beingness creaseless you into your surroundings. It remains Day 1.


Jeffrey P. Bezos
Founder and Chief Executive Officer, Inc