By Tiernan Ray
Shares of Amazon.com (AMZN) are up $7.77, or 1%, at $806.79, after the company this morning said it would create “more than 100,000 new, full-time, full-benefit jobs” in the U.S. the next 18 months, bringing its workforce to 280,000 from 180,000 today.
The context, of course, for the announcement, is Amazon CEO Jeff Bezos having met with U.S. president-elect Donald Trump, along with other tech leaders, on December 14th, and implications of trouble for Bezos by Trump during Trump’s campaign speeches.
The company made the case it also creates follow-on jobs for partners and suppliers: “In addition to direct job creation, Amazon businesses like Marketplace and Amazon Flex will continue to create hundreds of thousands of jobs for people across the U.S. who want the flexibility to start their own business, work part-time or set their own schedule.”
In a note to clients today, R.W. Baird’s Colin Sebastian, who has an Outperform rating on Amazon shares, and an $850 price target, is upbeat about the announcement, writing that is suggests confidence in the business:
As the growth in Amazon hiring appears to be accelerating, we view this announcement positively in terms of the current trajectory of Amazon’s businesses, as well as management’s confidence in the long-term outlook. We also note that hiring is consistent with our view that Amazon will continue to invest aggressively in its retail, media, technology and logistics businesses, rather than focusing on margin improvement.
Sebastian thinks this is not about political pressure: “We suspect there is little, if any, shift of employment at Amazon from international locations to the U.S. Moreover, we expect the pace of hiring internationally to accelerate as well.”
Note that the jobs Amazon is trying to fill are often tech jobs, sometimes fulfillment centers:
According to Amazon, new FTEs will span a variety of roles, but emphasis placed on staffing new fulfillment centers as pace of expansion increases (AMZN opened 26 new FCs in 2016, up from 14 in 2015). We note that Technology roles account for the majority of current job listings, most notably in software development, consistent with the company’s commitment to cloud, machine learning, etc. Please see Figure 1 for more details.