Amazon, the world-leading retailer and pillar of the Internet economy, is celebrating 15 years since it first moved into Lexington.
Opened in 2000 with 35 employees in a few thousand square feet of warehouse space, Amazon’s Lexington fulfillment and distribution center has grown along with the company. Which is to say, exponentially. Lexington’s center now encompasses nearly 1 million square feet of space in two buildings and employs 1,500 workers, or “associates” in company parlance.
“Associates make the magic. Nothing is possible without them, and our growth in Lexington is because they make it happen,” said Brad Shirk, director of fulfillment and general manager of the Lexington facilities. “Many of the innovations across the company are the result of the Lexington facility and its employees.”
Amazon set up shop in Kentucky 16 years ago, with a location in Campbellsville. Since then, the company has invested heavily in the commonwealth, employing more than 7,000 workers in 11 fulfillment centers around the state, and at a customer service facility in Winchester. (Amazon bought online shoe retailer Zappos.com in 2009 and includes its Shepherdsville distribution center in its accounting.) The company says it has invested about $350 million in Kentucky and is the state’s fifth-largest employer.
Company officials said Kentucky’s central location makes it ideal, with more than half of the U.S. population within a day’s drive. In addition, Louisville and Cincinnati-Northern Kentucky airports are high-volume air freight shipping centers, helping the company quickly reach customers around the world. And UPS, a major shipper for Amazon, has and their facility at the Louisville airport is the company’s largest hub.
Most of the rank-and-file jobs in these operations center on fulfilling customer orders, often known as “pick and pack.” These are typically fast-moving, physically demanding jobs, and the pressure on Amazon employees to increase shipping rates continues to grow. Many employees say they like the pace, though it can be grueling.
For example, on Cyber Monday in November 2012, the company shipped 26.5 million items from facilities worldwide at a clip of roughly 306 items per second. In 2014, those global shipping figures skyrocketed to 36.8 million items on Cyber Monday, and an eye-popping pace of 426 items per second. It’s important to note that Amazon employs a variety of robots in fulfillment centers, and company officials give them some credit for increasing productivity. (The company did not provide figures for production rates at Kentucky facilities.)
To compensate employees for this highly accelerated pace, the company says it offers higher wages and broader benefits than similar operations. The Lexington center has about 30 employees who have been there the entire 15 years; a larger number of associates have five and 10 years with the company.
The company is now the largest retailer in the world. Because of its sales boom, its stock has soared more than 75 percent this year alone, and it has a market value of more than $250 billion, a full 30 percent more than that of Wal-Mart at about $190 billion. That’s even more impressive in light of Standard and Poor’s being down 2.9 percent for the year. Stay tuned, though, because Amazon is expected to lose about 15 cents per share in the third quarter despite its continuing push for sales and production.
The company also encourages employees to further their education, even if the field of study takes them from the company. For instance, the company is developing on-site “Career Choice” education facilities. Besides taking classes online and at Elizabethtown Community College, the Campbellsville workers soon will be able to take classes in Amazon facilities.
If an employee has been with the company for at least a year, they get 95 percent of their tuition paid for undergraduate classes, skills training or other continuing education programs, even for getting a license to drive trucks. The Lexington facility is also getting a Career Choice center.
Shirk said the company also recruits military veterans.
“Some of the reasons we hire ex-military personnel are because of their leadership, the structure, the discipline, the military standards, and we are a very standards-driven company, so it’s a great fit,” he said.
Amazon and its CEO, Jeff Bezos, have garnered praise and critics while guided the company’s massive growth, including a recent New York Times expose that cast the leadership culture as hard-charging to the point of callousness.
Nina Lindsey, an Amazon spokeswoman, said culture was dynamic.
“We have a participative leadership style,” she said. “We want feedback from associates, and we make decisions based on that feedback. We have a motto that says, ‘Have fun and make history.’”
For now, 15 years looks to be just the beginning of Amazon’s history in Lexington.