Amazon’s new CEO can help workers and salespeople – or automate them

Amazon uses software to manage in a way unlike any other company, except perhaps the giant economy giants Uber Lyft,

DoorDash and Instacart. Whether they’re driving a delivery van, choosing items from the shelves, or trying to maintain their inventory of products to avoid being removed from the list, Amazon’s employees, subcontractors, and salespeople are monitored, evaluated, rewarded, and even flagged for reprimand or software training.

Although Jassy is often described by those who worked for him as being very similar to Jeff Bezos, but perhaps more warm and confused, there is undoubtedly a great contrast at present between the way he handles his immediate reports and the way the algorithms and the artificial intelligence treats its millions of frontline workers and salespeople in the market. If Mr. Jassy can figure out how to use algorithms to manage employees and partners as humanly as he apparently manages the people he works with personally, that could be his defining legacy as CEO.

Having developed Amazon Web Services from a small startup he led within Amazon, which began in early 2000, in the cloud market giant (and generates half of Amazon’s profits), Jassy understands not just the plumbing of the Internet for countless technology companies AWS offers support, from Netflix to Slack, but also as it is connected to the various businesses belonging to Amazon itself. Now 53, Mr. Jassy joined Amazon in 1997, immediately after graduating from Harvard Business School.

Jassy’s experience running a cloud operation may not qualify him to run a competitor like Walmart,

which is still dominated by physical stores. But, along with his nearly 24 years at Amazon, this gives him an edge in overseeing Amazon’s e-commerce operations and the rest of his expanding empire. (Cloud computing is the remote computing power accessed over the Internet and is the primary enabler of everything from the mobile revolution to a large number of services that we think are guaranteed, from streaming to AI.)

The Amazon empire faces challenges – technological, operational and regulatory – as big as anyone it has ever faced.

To begin with, there is a question that goes to the heart of what kind of corporation Amazon wants to be. Company executives are emphatic about their desire to preserve employee health and give them opportunities to grow and develop, but the way Amazon manages employees and vendor partners with algorithms is often in conflict with these values. If Mr. Jassy chooses to make changes, can Amazon design his software and systems to be more empathetic to the needs of those who serve and govern?

The same cloud infrastructure that Amazon uses to manage and transact with millions of customers also supports systems that, in many ways, make their employees increasingly difficult and often leave their third-party vendors unsure how to navigate the market. Amazon – fueling complaints and investigations about your labor and competitive practices. Will Amazon design its systems to improve workers’ quality of life and promote better and more transparent relationships with its suppliers?

Next, will Mr. Jassy balance Amazon’s status as one of America’s largest employers with the company’s effort to automate as many functions as possible? And finally, how much of that will he be able to achieve in the face of growing antitrust investigations and calls for the company’s dissolution?

Mr. Bezos’ departure from the position of CEO gives the company a chance to try to redefine its public image, in Washington and around the world. Many who worked with Jassy said that although he is like Bezos in some ways, his temper is more gentle and discreet.

David Risher was senior vice president of retail for Amazon from 1997 to 2002 and worked closely with Jassy. “If the past is prequel, he will lead with his heart and also with his head,” says Risher. “He leads with genuine empathy – the kind you can’t pretend to.” The two are still in contact; Mr. Jassy is a member of the advisory board of the non-profit organization Mr. Risher’s Worldreader, which gives underprivileged children access to digital books.

Throughout the supply chain of Amazon’s e-commerce operation, humans are quickly integrated into jobs that require almost no training. This is possible due to how driven and limited by algorithms and automation these functions have become. In Amazon’s most advanced distribution centers, for example, employees who choose items to order from the robots’ shelves are watched by AI-enabled cameras. A scanning gun connected to the cloud monitors the rate at which they choose items, the number and duration of their breaks and whether they are taking the right items and placing them in the right places. Managers only need to intervene if the software reports a problem, such as an employee falling behind.

A spokesman for Amazon objected to the characterization that anyone on its premises is “algorithmically managed” because all associates have a human manager who is responsible for them and who guides them if they do not meet performance expectations. “Our frontline employees are the heart and soul of Amazon” and receive the same benefits as corporate employees from the day they start at the company, added the spokesman. Amazon said in the past that only a small percentage of members are fired or leave the company because of performance problems.

The software has also replaced the humans who would normally handle retail partner accounts. Even the big brands that decide to sell on Amazon are mostly dealing with the company’s automated systems. AI rules almost entirely how sellers are treated in the Amazon market, and it’s not always easy to work with him, says Jason Boyce, who for 17 years was one of the 200 best sellers on Amazon and who later founded Avenue7Media, which helps companies to sell on the Amazon market.

“Their AI is not nuanced at times,” he says. This will sometimes knock down sellers’ listings with few warnings, leaving small businesses struggling to make payroll, he adds.

“Amazon invests heavily in supporting our sellers as we work together to serve customers and protect sellers’ brands,” said an Amazon spokesman. “It is in our economic interest to minimize any interruption in sales by our sales partners and we work hard to avoid misapplication. We call all low-risk or effective salespeople before suspension and offer a clear path for salespeople to appeal enforcement decisions through our team. ”

Mr. Jassy can choose to improve these systems or simply automate the majority of his employees. And, if regulators do not intervene, so do many of their partners and market vendors.

At the moment, Amazon needs all the workers it can. But depending on whether union efforts at the company are gaining momentum, the company may soon have another powerful incentive to replace workers with automation as soon as possible. The company has tried several tactics to avoid unionization at its facilities, arguing, among other things, that a unionized workforce would reduce the flexibility it needs to continue to adapt its systems.

Of course, Amazon wants to use its AI and cloud computing infrastructure in even more ambitious forms of automation, such as autonomous, drone and wheeled vehicle delivery. Given that Amazon has outsourced thousands of local delivery franchisees the last mile of delivery within its own logistics network, the company could terminate contracts with these companies virtually overnight, as it did in the past, without affecting the size of the delivery force. work you directly employ.

Bezos, who has a talent for long-term thinking, seems to have chosen the right time to nominate an unflappable CEO who has the opportunity and possibly the temperament to polish Amazon’s image. The biggest challenges in Amazon’s immediate future, other than unionization, are what could be years of congressional hearings, as well as federal investigations into whether Amazon is a monopoly that must be undone, says Paul Armstrong, industry analyst and creator “What did Amazon do this week?” Newsletter.

Under Mr. Jassy, ​​”I think you will possibly get a more boring Amazon,” adds Mr. Armstrong. Known for his cool head and attention to detail, Jassy also has the benefit of not identifying with Amazon as personally as Bezos, its creator. This could be useful for him, as he is forced to appear before Congress on a semi-regular basis and spend a significant portion of his time meeting with lawyers, should antitrust lawsuits against Amazon reach a critical point.

Whether all of this AI, software and automation will be used to lighten the burden on their employees or force them to work harder to stay up to date, it is a choice that all companies face in the age of digitization, and nothing more than Amazon. It is possible that Mr. Jassy chose to manage this ongoing transition in a different way than the famous and tough Bezos did. It is also possible that he may be forced, by the attention of regulators, to manage things differently from Bezos.

—For more WSJ Technology reviews, analysis, advice and headlines, sign up for our weekly newsletter.

Write to Christopher Mims at [email protected]