Total Pageviews

Sunday, July 28, 2013

A New Role for Amazon: An Engine for Jobs

American technology companies like Apple have been criticized for outsourcing manufacturing of their gadgets to China, rather than employing people to do the work in the United States. But one tech icon, Amazon, is seeking to call attention to the thousands of working-class jobs it’s creating in the United States.

On Monday, Amazon plans to announce it is creating more than 5,000 new full-time jobs in its United States warehouses to handle growing customer demand. The company currently employs more than 20,000 warehouse workers here, so the new positions represent a significant increase in its head count.

Amazon’s announcement is timed to coincide with a speech on middle-class jobs that President Obama is expected to give Tuesday at an Amazon warehouse in Chattanooga, Tenn.

The jobs will be in warehouses in 10 states, from Delaware to California.

For a tech company, Amazon is an unusual hybrid of white- and blue-collar jobs. It employs plenty of computer scientists, MBAs and all the usual types found at technology companies. But it also relies on tens of thousands of people to do the sweaty, physical work of picking, packing and delivering Amazon orders. Those are jobs Amazon can’t outsource to China (though the company, like nearly all electronics makers, does have its electronic device, the Kindle, made overseas).

How great those jobs are is a matter of some debate. The working conditions in an Amazon warehouse in Pennsylvania, including excessive heat, was the subject of an investigative article in 2011 by The Morning Call newspaper in Lehigh Valley. The company says it remedied the heat problem by installing air-conditioning in its facilities. Amazon has also resisted union organizing at its warehouses.

Amazon said median pay in its warehouses is 30 percent higher than retail pay in those same areas. That doesn’t include the stock grants full-time employees receive, which over the past five years have added an average of 9 percent to workers’ base pay annually.

The sheer numbers of people Amazon is hiring has obviously landed the company on the radar screen of politicians stumping for job growth. Since September 2008, around the start of the most recent recession, Amazon said it has added more than 40,000 jobs in the United States, including warehouse and white-collar jobs.

Just last week, Amazon reported that it has 97,000 full-time employees around the globe, an eye-popping 40 percent increase from a year ago. The additional 5,000 positions it plans to hire for will push its global head count above 100,000.

By contrast, Apple reported its head count was over 72,000 at the end of last September. Microsoft has over 99,000 employees. Hewlett-Packard has more than 300,000 employees; I.B.M. has over 400,000 workers.

But Amazon was founded in 1994, decades after those other companies. It has certainly gotten big, fast.

Today’s Scuttlebot: Commitment Issues on Twitter

Log in to manage your products and services from The New York Times and the International Herald Tribune.

Don't have an account yet?
Create an account »

Subscribed through iTunes and need an NYTimes.com account?
Learn more »

Disruptions: Microsoft’s Struggle to Make Things Simple for Consumers

In March 2006, a parody video asked, “What if Microsoft made the iPod?” The clip began with an image of the real packaging for an iPod, that familiar white box with a single picture of the music player. Then, bit by bit, it added what would happen if Microsoft got involved.

By the end of three minutes, the dainty music player had been renamed the The iPod Pro 2005 XP Human Ear Professional Edition with Subscription, and the stark box was sullied with stickers and jargon promoting almost every technical feature on the device. A design inspired by modernist architecture (think the Guggenheim Museum) was turned into a gaudy billboard (think a trinket store in Times Square).

In recent years, Microsoft has been trying to shed its reputation for trumpeting features over simplicity, but old habits are proving hard to break. Yes, Microsoft has released products like the Xbox and Windows Phone 7 that were intuitive to consumers and marketed with a fair amount of finesse. But far too often, the company has tried to create products for the modern consumer with a mind-set from the information technology back room.

And there are consequences for this disconnect beyond satirical videos. Microsoft said this month that it was taking a $900 million write-down for unsold inventory of the Surface RT tablet, which went on sale less than a year ago.

Just thinking about the Microsoft Surface tablets is a head-scratcher. The company offered two products, the Surface RT and the Surface Pro. One came with a pen. They both had USB ports, microSDXC card slots, HD video ports, flip-back stands, different screen resolutions and two types of Windows software.

If all that confused you, you are not alone. While the technologically savvy most likely lapped up those features, average consumers did not.

“Windows is a hammer, and everything looks like a nail” to Microsoft, said Ryan Block, a former editor at Engadget and a co-founder of Gdgt, a gadget Web site. “You can look at the Surface, which is the best example; they created this totally blown-out tablet based around Windows and Windows-like experiences that didn’t translate” for most people.

Microsoft enthusiasts and some pundits came to the company’s defense last week, saying that the Surface had failed because the iPad hit the market years earlier and had too much of a head start.

Maybe. But I have a different theory: the Surface failed because Microsoft confused consumers who didn’t want to think about RT or Pro or what version of Windows their new gadget would run.

“The people in Redmond have a fundamental misunderstanding of what users are looking for, which is not speeds and feeds,” said J. P. Gownder, a vice president and principal analyst at Forrester Research.

“Speeds and feeds” is an old trade magazine term for the technical specifications of a new PC. Fifteen years ago, that a computer was a little bit faster or had more memory than the last version was a very big deal. The string of numbers and jargon on the side of a computer’s box was a sort of runic code that made sense to I.T. managers or tech-savvy relatives coerced into helping the less sophisticated. It told them what to buy.

That is just not the case anymore. Consumers demand something that is easy to understand, and they got that in products like the iPad.

There is one flaw in the theory that Microsoft’s tablet did not catch on because the iPad was already popular: Microsoft was late to the game, but it was hardly late to the idea. The company helped popularize the term “tablet PC” when Bill Gates introduced one in 2000 at the annual Comdex computer show in Las Vegas.

But it was Apple, a decade later, that figured out how to simplify the tablet and sell it to mainstream customers.

Microsoft says one of the reasons the company does offer all of these features â€" and feels the need to explain its gigahertz and gigabytes â€" is that it has to market its products to small businesses and I.T. professionals, and they still obsess over bigger, better, faster.

That’s where technology culture runs into consumer culture, and the two clash.

Frank X. Shaw, Microsoft’s vice president for corporate communications, said Microsoft was trying to do something about that. He said Microsoft had made great strides to instill a more balanced culture of design, marketing and engineering, and executives there said a reorganization announced this month would inspire more consumer-friendly offerings.

Microsoft said it was dissolving its eight product divisions in favor of four new ones arranged around more specific themes. “To execute, we’ve got to move from multiple Microsofts to one Microsoft,” Steven A. Ballmer, the company’s chief executive, told my colleague Nick Wingfield in an interview.

“Are we an engineering-focused culture? Yes, we are, and that’s good. Most great technology companies, at their core, have a deep engineering bias,” Mr. Shaw said. “One of the goals is to make sure we have a more singular vision for what we’re offering to people.”

A few months after the satirical iPod video first drew attention online, Microsoft admitted that it had been responsible for the video. Turns out, it was meant to be circulated internally to show how the company needed to change its culture.

I asked Mr. Shaw about the iPod clip, and he said Microsoft had evolved from an insular technology culture to one that is more aware of customers’ needs.

“I think we’re significantly better,” he said, while acknowledging that the company still had work to do. “The question is, How do you mirror engineering with equally strong skills in design and marketing? If you’re overly strong in any of those areas, odd things can happen.”

He’s right. Odd things like Microsoft’s convoluted Surface tablets.

E-mail: bilton@nytimes.com