On an industrial estate outside Swindon, it’s the busiest time of year at Amazon’s newest warehouse in Britain. Black boxes rattle along miles of conveyor belt, carrying everything from toys to painkillers amid a cacophony of alarms and the faint hum of Christmas songs.
“I’m looking around here at anything that might not be right, but it’s actually running very smoothly,” says David Tindal, the general manager of the Swindon fulfilment centre. “The team has been fantastic. We spend the whole year preparing for this peak time, like a good football club preparing for the cup final.”
Known internally as BRS2 – using a naming system based on the nearest big airport (in this case, Bristol) – the warehouse is a vision in gleaming concrete, steel and glass landed on the Wiltshire countryside.
The vast site is a stark reminder of Amazon’s might. As well as upending consumer habits and standing accused of gaining an unfair advantage by paying too little in tax and hollowing out high streets, the company is creating huge distortions in the jobs market. The new depot has created its own gravitational force sucking staff away from other businesses such as care homes.
The latest outpost of Jeff Bezos’s empire also illustrates the shifting economic sands in the western world. In July, the nearby Honda car factory closed – a decision blamed partly on Brexit – with the loss of about 3,000 direct jobs plus thousands more in the supply chain, many of which were high-paying, skilled roles.
Amazon has hired 2,000 staff in a matter of months in Swindon, opening the site earlier than planned at the start of November to exploit the online shopping boom in Britain, and advertising roles as “a job for life, not just for Christmas”.
With hiring bonuses of up to £3,000 at some of its 150 UK warehouses, and starting pay of £11.10 an hour – more than £2 higher than the legal minimum, and above the £9.90 real living wage – the firm is aiming to shake a reputation as one of Britain’s worst employers, notorious for low-paid jobs and bleak working conditions.
For Sue Houldey, the operations director at Coate Water Care, which runs three care homes in the town and six others across the west country, Amazon’s arrival in the area coincides with the toughest hiring challenges of her career.
“We’re competing with Amazon and the big warehouses, as well as hospitality, for the same people. It can be very frustrating,” she says, sitting in the cafe of the Church View nursing home in a quiet residential area of the town.
Coate Water hasn’t lost staff directly to Amazon, but competition for a slim pool of candidates is fierce. Insufficient funding for social care and soaring fixed costs make it difficult to raise pay much higher than the £8.91-per-hour legal minimum, making a job at the nearby Amazon depot 25% more lucrative.
With more than 100,000 vacancies in the care sector nationwide, many staff are leaving to work for Amazon and other higher-paying jobs across the country. “Nobody wants to discuss it because it’s unpalatable. But the funding that we get doesn’t allow us to pay probably what we want to pay for our staff,” says Houldey.
As with retail, winter is peak time for the care sector, except the stakes are far higher than the rush for Christmas presents. Houldey must meet Care Quality Commission requirements for sufficient staff numbers. “If [you are Amazon and] one of your workers doesn’t turn up, it’s like: hey ho, everyone else can just work a bit harder, or we might not get stuff done. Those rules don’t apply in care. It’s not an equal playing field.”
Official figures show a record 1.2m job vacancies across Britain, with shortages of lorry drivers in particular attracting national attention amid panic-buying of petrol and gaps on supermarket shelves this autumn.
Approaching Christmas, there are many reasons for the employee drought. Britain’s workforce has shrunk since the onset of Covid-19, with more than half a million more people out of work and not looking for a job. as Some have taken early retirement and young people have pushed back the start of their working lives. More than 200,000 EU citizens have left the workforce, and Covid restrictions and Brexit migration rules are limiting arrivals.
With more than a million furloughed workers leaving the scheme after it closed at the end of September, and others looking for a new job in the so-called “great resignation”, job switching has hit record levels.
Amazon has played a substantial role in Britain’s labour market flux, hiring 10,000 people in the past six months alone to take its overall UK workforce to 55,000.
The arrival of a new warehouse might be hailed by local politicians for “creating jobs”, but switching from an old employer is more likely, in a form of labour market creative destruction with winners and losers.
In Swindon, a town with a total workforce of about 110,000 where unemployment is below the UK average at 3.9%, the arrival of a big new employer hiring thousands of staff has a noticeable impact.
“When you drop a stone like Amazon into the local labour pool, it makes quite big waves,” says Tony Wilson, the director of the Institute for Employment Studies.
He says the company is following a similar path to McDonald’s two decades ago, when negative media coverage pushed the fast-food chain to clean up its act.
“They have to have good employment practices because there’s so much attention on them. As a consequence, a misconception can form relatively quickly that this is all crap work, and the reality is it isn’t.”
In the ripple effect of Amazon coming to town, Domingos Dias has seen more than 100 of his colleagues leave the Marks & Spencer warehouse (run on an outsourced basis by DHL) where he works. The departures have left resources stretched.
“Where you would have 10 people, 20 people, they now try to do it with five,” he says. “Since Amazon came, they had these opportunities and people went for the better prospects for higher salary.”
The GMB trade union shop steward is pushing for higher pay for employees and agency staff, who are paid less than at Amazon on £9.45 an hour. “Suddenly there was a thing that this new warehouse is coming. The guys who were working for 20 long years on agency contracts, they didn’t have any loyalty for Marks & Spencer and DHL, so they saw this and grabbed the opportunity.”
Pay is rising fast in warehousing work, according to figures from the jobs website Indeed, with the median hourly wage up 11% this year from £9.25 to £10.27. Pay in other sectors is rising more slowly, and failing to keep pace with soaring living costs.
The prospect of higher pay is enticing workers to the warehouse, contrary to the reputation of Amazon as a poverty employer. Still, critics argue that Bezos – among the world’s richest people, with a fortune of more than $200bn (£150bn) – could easily afford to pay more, rather than launching a space tourism business. Hours are still long and the company does not recognise trade unions.
The timing of Amazon’s arrival could prove helpful, however, after Honda gave up on its factory after more than three decades in Swindon. Tindal bumps into former Honda employees on a regular basis at BRS2, including an engineer with 30 years’ experience maintaining robotic arms – used for spraying cars with paint – who now looks after the army of blue robots that scuttle goods around a vast cage of consumer goods in the Amazon warehouse.
Jay Colsell, who worked on the final shift at Swindon after five years with Honda, is another. He says pay was higher and hours shorter in his old job, but there are more opportunities for career progression at Amazon. “Honda was busy. It was hard work; good money but you worked for it. Amazon is also good but you don’t have to run around lots, you just have to be proactive.”
A modern-day equivalent of a Victorian factory, only on a dual carriageway rather than the railway that put Swindon on the map two centuries ago, the new warehouse covers an area the size of nearly seven football pitches.
Tindal recruited about 600 staff ahead of time and trained them at Amazon’s older Bristol fulfilment centre in order to launch as smoothly as possible at the start of November. The general manager, who has opened three other sites for the firm from scratch – at Daventry, Rugby and Milton Keynes – says even more expansion is expected after the Christmas rush.
“We’re probably still advertising, I haven’t checked. We’re going to pause for now until the new year, but then we’ll be hiring some more.”