Amazon got hit with a double whammy of bad news in the past two days. On Wednesday, the federal Occupational Safety and Health Administration revealed a bevy of citations it has issued for workforce safety violations at Amazon warehouses.
Yesterday, the tech giant reported a net loss in 2022 of $2.7B—a swing of more than $36B from the net income Amazon reported in 2021.
After a series of inspections that began in July, OSHA said it found Amazon failed to properly record work-related injuries, failed to provide a safe workplace and had structured its operations in a way that exposes its workers to risk of injuries.
Specifically, OSHA cited Amazon for failing to report workplace injuries at six of its warehouses. The federal workplace safety monitor reported that workers at all six warehouses faced a high risk of lower back injuries and musculoskeletal disorders.
OSHA said the high risk at these logistics facilities was due to long hours, awkward and repetitive motions and the weight of items workers are lifting, picking and packing, the Seattle Times reported.
“Amazon’s operating methods are creating hazardous work conditions and processes, leading to serious worker injuries,” Doug Parker, assistant secretary for occupational safety and health, said in a statement.
“They need to take these injuries seriously and implement a companywide strategy to protect their employees from these well-known and preventable hazards,” Parker said.
OSHA opened its investigation into Amazon facilities after a state regulator in Washington in 2021 accused the Seattle-based tech giant of ignoring worker safety during Amazon’s frenetic effort to double the size of its logistic network when e-commerce surged to more than 50% of retail sales in the middle of the pandemic.
In July, OSHA opened inspections at Amazon warehouses in Deltona, FL; Waukegan, IL; and New Windsor, NY. It began investigating three more facilities in Aurora, CO; Nampa, ID and Castleton, NY in August.
OSHA discovered that warehouse workers at these facilities were required to pack 70 boxes in an hour for up to 11 hours a day, with two 30-minute breaks. They also were required to reach across conveyors and lift totes holding 20-pound cases of water in an awkward position that resulting in torn wrist ligaments.
OSHA began issuing citations in December, the last batch coming on Wednesday when the violations were made public.
The US Department of Justice is investigating whether Amazon “engaged in a fraudulent scheme designed to hide the true number of injuries” to its workers, according to a statement from the U.S. Attorney’s Office for the Southern District of New York.
“We don’t believe the government’s allegations reflect the reality of safety at our warehouses,” Amazon spokesperson Kelly Nantel said, in a statement that also promised to cooperate with federal regulators to “mitigate risks.”
Perhaps trying to mitigate the impact of the public release of the citations, Amazon CEO Andy Jassy sat for a rare television interview on Bloomberg over the weekend. When asked what his top priority is for 2023, Jassy replied: “workforce safety”—without mentioning the citations from OSHA.
Amazon’s net loss comes at the end of year in which it admitted it over-estimated the rate of e-commerce growth and over-extended its logistics network. Since April, Amazon has been shrinking its logistics footprint by postponing the opening of new warehouses for up to two years, canceling new warehouse projects and opting out of up to 30M SF of leased industrial space.
More recently, the e-commerce giant has begun selling off some of the 4,100 acres of land and property it purchased during the pandemic for new warehouse development, GlobeSt. reported.
Amazon, which recently announced it is cutting 18K jobs, attributed the 2022 losses to its investment in electric truck startup Rivian, which has struggled to ramp up production.
Amazon said it lost nearly $13B in pretax valuation from its Rivian stake in 2022, most of which was offset by a 9% increase in net sales to $514B.