Amazon hired nearly 28,000 new employees over past year, bringing its total number of employees to 65,600 as of March-end; increase could leave Amazon well-positioned for future growth or overextended, analysts say

LOS ANGELES , May 16, 2012 (Industry Intelligence) – Amazon Inc. has hired nearly 28,000 new employees over roughly the past year, bringing its total number of employees to 65,600 as of the end of March, The Wall Street Journal reported May 15.



The 73% increase in employment during this period could either leave Amazon well positioned for future growth or overextended, analysts said.



Between 2007 and 2011, Amazon’s employee count increased by more than a threefold. In 2011, Amazon ranked sixth in terms of employee growth rate out of the companies listed in the S&P index.



In 2007, Amazon generated approximately US$873,000 worth of sales per employee. In 2010, that figure rose to more than $1 million before declining to roughly $856,000 in 2011.



It unclear how many of the 65,600 individuals that were employed by Amazon as of the end of March worked part time.



Year-over-year, Amazon’s operating margin during the first quarter fell to 1.5%, down from 3.3%.



Investors have already given Amazon a great deal of leeway in regards to its declining margins, said McAdams Wright Ragen Inc. analyst Dan Geiman.



Although Amazon’s rapid hiring rate could be considered an encouraging sign of confidence, investors may not be so willing to forgive further erosions of Amazon’s operating margin, warned Stifel Nicolaus and Company Inc. analyst Jordan Rohan. The Journal reported.



In 2011, Amazon opened 17 new shipping centers. It intends to open approximately 13 of these facilitates in 2012, bringing its total number of shipping centers to 82. In addition, Amazon is moving into a variety of new businesses such as high-fashion retail and original TV programs.



During a conference call regarding Amazon’s earnings report that was released in April, Amazon Chief Financial Officer Tom Szkutak said that although the company will likely moderate its hiring pace, they are currently concerned with ensuring that they have the right resources given Amazon’s rate of growth.



The primary source of this article is The Wall Street Journal, New York, New York, on May 15, 2012.