Amazon is hiring 100,000 more workers this year than last.
Phil Nijhuis/ANP/AFP via Getty Images
Amazon.com’s
ambitious holiday hiring plans suggest the company is poised for a strong holiday season, analysts say.
The retail and cloud-computing company brushed aside concerns that holiday hiring would slow this year, and said on Tuesday it was onboarding 250,000 seasonal workers this year, up from 150,000 in 2022.
That likely means
Amazon
(ticker: AMZN) is preparing for a strong holiday season, even as competitors may be taking a more cautious approach.
“Strong growth in hires for the holiday season is a positive indicator of expected future demand, particularly when compared to seasonal additions from other retail players,” wrote Morgan Stanley analyst Brian Nowak in a Wednesday note.
Amazon stock was down 0.2%, at $137.30, in recent trading. The
S&P 500
was up 0.2%.
Hiring trends across others in the space are flat to down so far this season, wrote BofA Securities analyst Justin Post in a note to clients.
Target
(TGT) is hiring 100,000 seasonal workers, roughly the same as last year, while
Macy’s
(M) is targeting 38,000 new hires, down from 41,000 last year. The U.S. Postal Service also scaled back its hiring this year. It plans to bring on 10,000 seasonal workers, down 64% from 28,000 in 2022.
Amazon’s labor scale-up won’t be cheap. The company said it was investing over $1 billion in hiring and labor benefits, and workers will earn $20.50 an hour on average, up from about $19 a year ago. These investments could certainly weigh on margins in the fourth quarter, Post wrote, but they will likely be offset by greater overall gross profit.
Nowak believes Amazon’s seasonal hires are a “bullish leading indicator” that the company will continue to gain market share within the retail sector. Amazon is Nowak’s top pick within the internet sector. He rates the stock Overweight with a $175 price target.
With consumers poised to spend less this year than they did in 2022, retailers will be vying for their shrinking share of consumer dollars. Companies that can offer consumers value and convenience will likely come out ahead—and online retailers such as Amazon are well-positioned to do so.
Deloitte is predicting that holiday sales will increase between 3.5% and 4.6% from November to January compared with the same period last year. E-commerce sales, however, could grow by up to 12.8% this year.
“E-commerce sales should continue to be strong as consumers search for the best deals online to maximize their wallets,” said Nick Handrinos, retail leader at Deloitte.
Write to Sabrina Escobar at [email protected]
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