Amazon (AMZN) intends to recruit an extra 250,000 employees for the upcoming holiday season, marking a significant 67% increase compared to previous years. Other retailers like Macy's (M) and Target (TGT) will also be expanding their holiday workforce. Despite inflation, Wall Street analysts are anticipating a return to more typical consumer spending patterns this year.
Yahoo Finance's Josh Scahfer, Brooke DiPalma, and Pras Subramanian discuss various factors employers will be considering this season, including wage increases, labor unionization, and the challenges related to both recruiting and retaining employees.
JOSH SCHAFER: All right, guys. My story today is Amazon. I have my eyes on Amazon after they announced how many workers they're planning to hire for the holiday season. So Amazon coming out and saying they plan to hire 250,000 workers, 30 of those seasonal in just California alone. That's up 67% from what they've hired in years past. So obviously, Amazon expecting a big holiday season here. Target also out saying that they expect to hire 100,000 employees. Macy's saying it will hire 38,000 more employees.
Obviously, the holiday season just such a big time for these retailers. And it seems, though, the picture is a little bit mixed on what people expect for holiday sales but not necessarily at a company like Amazon. I think Amazon has solidified themselves for the holiday season. No matter what, they're going to get some demand.
BROOKE DIPALMA: Yeah. There's lots of takes from Wall Street and whether or not we're going to see an increase in consumer spending or rather a decrease. And one expert that I spoke to said, we'll see a normalization returning to pre-pandemic levels after we saw such an uptick in sales last year, largely due to inflation. That caused those sales to rise.
But in addition to that, as you can see here, these companies are largely bulking up. We heard from Target today that they plan to hire this holiday season. Amazon also ramping up its hiring this holiday season. But definitely a mixed picture on how much exactly consumers are going to spend, given all these headwinds that they're up against.
PRAS SUBRAMANIAN: I'm kind of surprised the sheer kind of numbers, right? Is it 100,000 more workers this year compared to last year? Which is sort of a crazy amount. Expecting fewer shoppers or fewer online shopping to happen, but still it's still a big year, adding boosting wages, which is good to see.
And I think is it sort of addressing the need that they want-- they need more workers, or is it there's been some unionization efforts at their warehouses, and this is sort of trying to say, OK, we'll give you guys a little bit here, just don't go crazy with the unionization at our warehouses because that's a problem for them?
JOSH SCHAFER: The boosting wages is interesting, too, right, to try and get people that are these seasonal workers. Like, how do you win that worker? I feel like we're still talking about this economy-wide right now, with the worker being someone that is still kind of feeling things out and is high in demand for the amount of job openings that we have. You do have to bump up that pay if you are Amazon.
And we were talking about yesterday about Meta. Part of that story with Meta, right, is that they want to retain employees. That's why some of the benefits are coming back. You're seeing companies realizing we probably do need to boost wages or we need to give these workers something, especially if they're going to be seasonal workers, right?
If they're only coming in for a short period of time, you've got to find a way to win them over compared to someone like Target.
PRAS SUBRAMANIAN: Right.
JOSH SCHAFER: That's probably the same kind of worker--
PRAS SUBRAMANIAN: Signing bonus, too.
BROOKE DIPALMA: Right. And something that I've been covering a lot is Walmart sort of now having this power over that potential worker, whereas we used to see it vice versa, that worker having that ability choosing where they want to go. But now Walmart sort of backtracking entry level positions that now, ultimately, be all the same pay. They say it's for more opportunity.
Others, experts out there saying that they now have power over how much exactly they could pay, and that maybe they could pull back a little bit on how much they're willing to pay and still get that opportunity. But we're seeing Target, Walmart, as well as Amazon ultimately start the holiday shopping season even earlier with tons of deals out in October, which is wild.