Amazon hiring outpaces projections

Amazon said Thursday that it has hired more than 2,500 people for full-time positions in Baltimore, a count that well exceeds initial estimates.

When plans for a 1 million-square-foot warehouse off Broening Highway were announced in 2013, the retailer and the city said it would employ about 1,000 people who would fill orders for delivery across the Mid-Atlantic region.

But spokesman Aaron Toso said Thursday that the Internet giant has hired more than 2,500 people since the opening of its fulfillment center March 30.

“It’s an astounding number of new jobs,” said William H. Cole, president of the Baltimore Development Corp., which helped lure Amazon and provided incentives for the warehouse.

The local hiring spree comes amid a broader hiring boom at the Seattle-based company, which reported last week that it had added more than 18,000 workers in the quarter that ended June 30. It employs more than 183,000 full- and part-time workers, 38 percent more than last year, reflecting the website’s continued growth as a shopping choice for consumers.

The Baltimore hiring put Amazon well above the pace to satisfy job requirements that came with the more than $43 million incentive package the city and state put together to lure the business to the city. For the loans included in the package to be forgiven, the company must employ at least 1,000 people for 10 years and invest $175 million here.

“I’m impressed that it’s double what Amazon had predicted because sometimes you are a little skeptical of the numbers that companies provide,” said Daraius Irani, chief economist for Towson University’s Regional Economic Studies Institute. “In this case, Amazon underestimated.”

Toso said the hiring has been driven by strong customer demand. Last week, the company reported results that surprised analysts with a $92 million profit and a 20 percent increase in sales in the second quarter.

“It makes sense that they’re going to want to increase their workforce in Baltimore because their business has been thriving,” said Kerry Tan, an assistant professor of economics at Loyola University Maryland’s Sellinger School of Business and Management. “If Amazon is able to keep it up, that could be a good sign for the warehouses in Baltimore.”

One reason Amazon’s hiring in Baltimore is so much higher is the company decided to add a smaller, 345,000-square-foot warehouse near the first facility about a year after announcing the first. However, Amazon did not revise its hiring estimate, so the expected impact of the second warehouse was unclear.

The facilities process “tens of thousands” of packages a day, Toso said.

They are partly automated, using robots to hunt items for shipment. But that system has helped boost local hiring, Toso said, because the company can store more products inside the building, resulting in more shipments.

The company’s workforce already has reshaped transit routes. Bus ridership in the area has grown by about 600 people on weekdays since the Maryland Transit Administration increased the number of buses in February as the campus opened, said spokesman Paul Shepard. On Monday, Amazon launched its own shuttles from Charles Center to the campus to supplement the bus service.

Toso declined to say when the company expects to hit capacity. The firm is still advertising jobs but does not have plans to add new buildings at this time, he said.

Together, the two Baltimore warehouses have a maximum capacity of 2,925 people, according to building permits.

“We have ramped up pretty quickly here in Baltimore, but we still have room to grow,” Toso said. “Customer demand will dictate the level of growth.”‘

The Baltimore area has experienced faster job growth in the past year than the rest of the state, with payrolls up 2 percent in June, according to the Bureau of Labor Statistics. That growth has not appeared in the transportation and warehousing sector, but since Amazon’s hiring is relatively recent, the company might not be included in Labor Department surveys, which rely on statistical sampling.

City officials say they do not know yet how many of Amazon’s jobs have gone to Baltimore residents but that they believe many have benefited.

About 1,000 people showed up for information sessions the city helped organize in February, double the expected turnout, said Rosalind Howard, business services program manager for the Mayor’s Office of Employment Development.

Baltimore’s 8.2 percent unemployment rate remains a couple of percentage points higher than the rest of the metro area and the state, but has fallen since the height of the recession.

“We are excited about the enthusiasm for the new Amazon facility, which will provide an opportunity to add hundreds of new jobs to Baltimore’s economy,” Mayor Stephanie Rawlings-Blake said.

Cole said the hiring figures show that the incentives offered to the company paid off.

“It certainly shows that the focus area, the enterprise zone, is having an impact in job creation and that’s exactly why it exists,” he said, referring to areas designated in the city for tax breaks associated with economic development.

Amazon has come under fire in the past for its labor practices, with reports of stifling buildings and lengthy workdays with limited breaks. The online post for a fulfillment associate in Baltimore advertises pay of $13 an hour and warns workers to be ready for a fast-paced environment, loud noise, long hours and temperatures above 90 degrees. (Toso said the facilities are air-conditioned.)

Though the pay is not high, Irani said the job benefits that come with a position at Amazon — including an Amazon offer to prepay 95 percent of the cost of tuition in some fields — could help the region in the long term.

“Will it be the equivalent of a biotech firm launching operations here? No. Or will it be the equivalent to the old [General Motors] plant? No,” he said. “But it is a good first step into the job market, and I think as many avenues as we can provide into the job market is good.”

The Amazon warehouse is located on the site of the former GM assembly plant that closed in 2005.

Tan said any job is better than no job, pointing to ripple effects for the economy as worker spending boosts other businesses.

“I’m not sure I would want to think about good jobs versus not good jobs,” he said. “More jobs is always better.”

nsherman@baltsun.com