#39 Amazon UK Boss: Make Work Experience Mandatory for Over-16s

24:46It was amazing. The idea of delegating some responsibility of your household to an AI agent, so not even asking the question, but it just buying stuff for you when it thinks you will probably need it. Is that on the way? There is a, not quite in the way you describe, but there is a service we have in the US that we're piloting called Buy For Me. But really importantly, the customer is in control every step of the way. So as a business, we have a huge responsibility. We have the customer's payment details. We know what we think they want to buy. And as I understand it, we will then go and buy that product.

25:25But at any stage, if the customer wants to change or wants to do something else, they can control that. It is a lot of responsibility, but it's one of the ways that retail is evolving. And I think I've been in retail for 20 years. One of the reasons I got into it 20 years ago is because it was dynamic, exciting, and it's still as dynamic as an exciting today as I think it's ever been.

25:46John Boumphrey:So what kind of stuff is that? Is it household goods? It's buying your washing powder and it just arrives at the door when you haven't even thought about it. Instead of having to subscribe, which is one of the things retailers are starting to do a bit more now, You just, it will, if you signed up to the bigger picture, is that what the future could well be? It could be, yes. You could say that there's a particular type of product that you'd like to buy when it hits this particular price. And you can specify those, as I understand it, and it will then go and do that over the course of time. You talk about this being in the US.

26:20Is this something that could be on the horizon in the UK soon? No plans at the moment to expand internationally. But if that changes, Sean, I'll be sure to let you know. please do and we know that drones is something in recent weeks that has captured a little bit of the imagination of deliveries we've seen the launch that you've had in Darlington where the pilot has been taking place this and people seeing these sort of mini little people know what a drone is I was gonna say mini helicopter everybody knows what a drone is these days but landing in a back garden somewhere and dropping out of the product is that pilot going as you expected to go we're in In the pilot phase, yeah, so far so good.

26:59The response from customers has been really good. And we're looking forward to extending that, making it available to more customers in Darlington. I was excited because that's the first place outside the US that we've launched our business, the drone business, we call it Prime Air. At the moment, it's a two-hour promise, but that's going to come down. I think in the US, it's normally within 30 minutes. And I think it will be a really helpful way. if you can imagine if you're a parent at home with a sick child and you need some cowpole or you need something rather than having to leave the house you're now able to get that really fast i think that's going to be really good for customers and how big do you expect this to be gosh we'll see over time we're right in the very early stages we will see how that works when we extend it in darlington and then we'll assess as we go but is the image you have in your mind because you will be closer to this and the future of this than many people who are contemplating this as a delivery method

27:59John Boumphrey:for something they might need. In your mind, is there a world where these are flying around above our heads non-stop? Are you living and imagining a world where there are drones galore in the air doing deliveries for what people want? Probably not quite in the way that you're describing. I think the way that will work is particularly initially in rural areas. So we're unlikely to see drones flying around central London, delivering to tower blocks anytime soon. I think it will start in areas that are more rural, more remote, where drones is a much faster way of getting products. But as I say, we're really early stages and we'll see how that rolls out.

28:37What consequence does this advance in technology, we've talked about a few aspects of them, have on the number of workers Amazon in the UK might have in five years time? Are you expecting Amazon in the UK to have more or fewer workers in five years' time? Look, we're a top 10 private sector employer. We've got 75 ,000 people today. Do I expect that we're going to be a top 10 private sector employer in five years, in 10 years? Yeah, absolutely.

29:05John Boumphrey:That's not quite answering the question, though, is it? Because if all private sector employers galore are embracing the latest technology and not employing as many people, it could be right across. If I take this year, we're adding thousands of jobs just this year. And last year, we announced a£40 billion investment, the largest we've ever made outside North America in the UK over three years. So between 2025 and 2027, that's investment into new fulfilment centres. We opened one in Hull last year. We're about to open one in Northampton. That's also into data centres. It's into new office buildings.

29:41We've just opened two buildings in Shoreditch. We've opened another one end of last year. So that's like the headquarters, is it? Correct. And one in Swansea, where we've got one of our four global software development centres.

29:52John Boumphrey:So you've got headquarters. So people can understand that there would be human beings walking around in a headquarters somewhere. Who knows, one day that might change with robotics. But those other places you mentioned, they can be extremely automated. They are extremely automated. Are they necessarily places for growth in jobs? Absolutely. So if you go back 10 years, when we first started putting robots into our warehouses, I remember seeing at the time people were really worried, concerned that somehow the robots would replace people. Actually, that didn't happen at all. Actually, the reverse happened.

30:28When we put robots into a fulfillment center versus one the same size that didn't have one, three things happen. The first is you can carry more products, significantly more products. the second thing that happens is you're much more productive because rather than having the employee walk down long aisles to pick items what happens is the robots which if you haven't seen them they're like a robotic vacuum cleaner with a big stack of shelves on top they come to the the individual and so it means it's much more productive but the third thing that happens is we end up employing more people and here's the thing it's not only employing more people the jobs that we now need are now higher skilled and higher paid because we need people to be what we call mechatronics engineers, people who can actually maintain the robots.

31:16And we need people who are robotics technicians. They're not roles that exist. We can't find enough people to fill those roles. And so what that means is, whereas historically we might have had a thousand people, one and a half thousand, we now need two thousand people and they're in higher paid roles. But as I say the problem is we can't find enough people and when you know you read the headlines about almost a million young people not in education employment or training and on the other hand we can't find enough people so what we're doing is we're investing really heavily in helping our employees develop new skills why is there that gap i think the i think too often you read about young people that somehow they lack motivation they lack resilience they lack the will to develop skills, that is not our experience.

32:04We have to stop blaming young people. It's not a motivation problem. It's a system problem. And that requires a system response. So what I mean by that is, our system isn't necessarily producing young people who are ready for work. And the most transformative thing that I've seen that helps young people is work experience. It could just be a week if you if you get a t-level students they come in for a week they understand the value of teamwork of communication of problem solving things that i don't think we teach in our curriculum but that all employers are looking for so i think what we need to do is think about things like how do we make should we make work experience mandatory for 16 plus do you think we should i think we I think we should.

32:55I think, as I say, it's the most transformative thing I've seen. And as I said, we employ 75 ,000 people. The majority of people work in our operations division, and almost half of them either come straight from education or from unemployment. so we see what these young people are like we've got a program called career choice where we'll pay up to three thousand pounds a year for our employees to get nationally recognized qualifications in some of the areas where we can't find enough roles so it might be things like it data center engineering it might be software engineers might be it or finance bookkeeping whole range of courses We've had 30 ,000 people take those roles.

33:38Well, quite. And we know that there's a demand for younger people to be able to try and get into workplaces. You know, the horror stories we hear about the number of job applications that are having to be made and they don't hear back.

33:51John Boumphrey:What is needed to happen to get more younger people getting work experience? Because I might, this might be a bit anecdotal just judging by the shows that we do. A lot of people might say, well, I get in touch with a load of businesses and they're not able to do this. So I think what you need is, I think you need businesses to come together with local governments and further education colleges. And you need that to happen on a regional basis so that you can understand what the skills gaps are. And you can also encourage businesses, particularly large businesses like Amazon, like we do, to offer work experience.

34:29and indeed to make sure that the education system is developing the type of skills that we need. But if I give you one example, Sean, of we work with some individuals who are probably furthest from work and that's where we actually see the biggest transformation. One example is our programme called Supported Internships, where we have a work experience programme for young people with learning disabilities and autism. And if you read the stats about that group, they are horrifying. 95 % of these young people are unemployed age 21. Their life expectancy is 10 years lower than national average, not because they have worse health outcomes, but because they have a lack of socialisation and purpose.

35:13and in this supported internship program which we started about four years ago we bring them into our warehouses one of our fulfillment centers they do college for an hour they work rotating around the different areas have lunch with their colleagues a bit more work and then they finish off on day one they can't look you in the eye they might be interrupting constantly throughout after nine months you see this unbelievable transformation they're giving presentations to their friends, their families, their colleagues. And what you see is people who are ready for work. And these are some of the hardest to reach young people.

35:46Do you think businesses across the UK do enough of that? Well, I think there's an opportunity to do more. And I think as a large business, clearly we've got the scale. Like as a business, you know.

35:58John Boumphrey:That's exactly it, isn't it? A lot of smaller businesses will be thinking, I would love to be able to do that. But the cost levels around it, the system isn't set up for me to be able to do it. That's right. Well, as a business with the scale that we've got, we've now become the largest private sector employer of these young people in the UK. And normally across the UK, when they do one of these supported internships, just 50 percent get a role at Amazon, about 80 percent. And we celebrate it when they get a role that isn't at Amazon. So going back to my point around coming together at a regional level, one of the things that we could do is we can help train these young people.

36:34And I remember meeting an amazing young man who told me that his dream in life was to work for a vet. That's what he wanted to do. And he came into Amazon. And after nine months, he was ready for work. And he got a job in a local vet, which we celebrated. So I think there's a way for large employers like Amazon to work with smaller businesses and help provide a pipeline of talent. And is the government assisting? Are they providing an environment at the minute that encourages businesses to do that? Yeah, I think they are. I think the youth guarantee that's recently been announced by the Department of Work and Pensions gets exactly after the challenge that we see.

37:13But when you look at the fact there's almost a million young people not in education, work or training, very clear that's a national crisis. And we need a really strong coordinated response. But it's very clear that is on the government's agenda. Given how much you talk about the future of work and training people and for people who may well end up working at Amazon or elsewhere, why alongside all of that? There might be lots of workers who have worked at Amazon in recent years, working at Amazon now, might think, listening to that, thinking, why don't you recognise the union that pretty much half of us want to have representing us officially to Amazon?

37:50Well, first of all, on a personal note, I am really glad that unions exist. I think they play a really important role. If you didn't have unions, we still have small children climbing up chimneys. And at the same time, as a business leader, if you give me two options, and you say an option one, you can engage directly with all of your employees, you can listen to them, you can make changes really fast. then so that's option one and in option two you don't engage with them directly you have to go via a middle person who may have their own vested interest i have a preference for the first of those but ultimately it's not me who decides it's our employees and if our employees choose that they'd like to be recognized by union then of course we'll do that we'll work with the union

38:35John Boumphrey:like we do in lots of other countries around the world it's 49 and a half percent to 50.5 wasn't it the vote just narrowly didn't pass effectively to for that to be recognized in coventry that's right in one of our hundred buildings that's right so did does that change did that when you saw that that number that was very close to just changing how you would work with unions does that change how you have to view the union at amazon i don't think it changes anything about what we do because our job whether we recognize union or not doesn't change our job is to be the best possible employer we can be.

39:12And that means giving people really good wages. It means giving them really good benefits. It means giving them flexibility. We've rolled out something called term time contracts for people who are carers. It means they get time off in the summer at Easter at Christmas. But it also means giving our people opportunities to grow and develop. And that won't change irrespective of what happens. Now, all of the we've discussed, and there are plenty of other things as well that we could get into about Amazon and the growth of this technology, the type of services that are being provided. Are they improving people's living standards?

39:48John Boumphrey:Because we keep talking about and have for years now a cost of living crunch. People don't feel like their lives are getting better. But at the same time, technology is advancing faster than it has in our lifetimes. The big tech companies like Amazon are getting bigger and richer. But people don't feel better off. so look i agree that technology is advancing faster than at any time in our history if you look at the stats on something like a chat gpt it hit 100 million users in two months four times faster than tiktok 15 times faster than instagram now it's also true that customers are really feeling the pinch and they felt that since 2022 when russia invaded ukraine and they're still feeling that today and so that's why you know as running the business in the uk that's why we started the podcast talking about this that's why we spend so much time focused on customers and asking ourselves how do we make sure we're able to offer the products they want at low prices because that is so important that obviously that's been an aim for retailers not necessarily forever but it's been a theme of the last couple of decades of getting prices lower and people for quite a while now have not seen living standards improved there's some imbalance there isn't there that everything that the rate at which everything is going and improving we're told so quickly is not actually improving people's lives the way they want that improved they might see a drone landing in their garden and the possibilities for 10 minutes deliveries and at the same time they'll see amazon as a company benefiting from that because that's their innovation but it's not trickling through to communities and and to the way people's lives and families are supposed to be improving year on year look so i understand the question it's really important that we are to me and to amazon as a business that we are being a having a positive impact in communities and maybe the best example i can offer of that is a charity that we started alongside former Prime Minister Gordon Brown about four years ago called Multibanks.

41:58And the idea is really simple. Businesses like Amazon have got what we call surplus goods, stuff we'd like to sell, but we can't. And then charities know the people in local communities who need them. And the idea simply connects the two. Now, we started that initiative in Fife in 2022. We've since rolled out to five other places across the UK, to Swansea, to Wigan, to London.

42:21John Boumphrey:But that's dealing with a problem that is there isn't it I'm just wondering you know it comes in a way back one of the ways many people might think you can sort of rebalance it and empower communities a bit more themselves is tax so if the tax from the profits that are made by businesses around the country is distributed in a fairer way more of that money might end up in those communities for them to make their own decisions about what they might be doing given the fact that you're having to sort of work with charities to do that kind of stuff. Do you think we are getting to a point where we need to ask a big question about whether this is actually working for people and whether big tech companies like yourselves need to pay more tax, while Donald Trump, very strong lobbyist for the American tech industry at the minute, is saying, actually, UK, we want you to charge these big tech companies less tax.

43:13John Boumphrey:We want you to scrap that digital services tax. Otherwise, we're going to lump you with a load of big tariffs? Well, what we do every year is we produce a report about how much tax we pay. And I think it would surprise people to know that last year, we contributed more than 5.8 billion pounds. So this is all the national insurance contributions and everything that businesses, businesses don't often don't often talk in those terms, do they? But Amazon do, because you don't say how much corporation tax? Well, what we do, we pay a billion pounds of direct tax which includes corporation tax which includes business rates which includes national insurance employer contribution which includes digital services tax and if you look in the UK there are fewer than 10 firms that pay a billion pounds worth of tax we've always paid not many firms sell what is it 30 billion pounds worth of stuff to the around the UK though do they well we are at look there's no getting away from it we are a big business of course we pay all the tax we're meant to pay.

44:11But when you think about our contribution, it isn't just the amount of tax we pay. It's also the 75 ,000 jobs we create and the impact we have in communities. We did a report with Public First that we published last month about what happened when we went to Stockton on Tees. We opened a fulfilment centre there in 2023. There's a multibank there, which has helped almost one in three households in that region. But also you find that we're paying£3 ,000 more than average entry level wages. And the welfare bill went down and the tax bill went up in the local community because we're offering higher paid jobs, high paid jobs, well paid jobs to people who might otherwise be unemployed.

44:56So that's an example of the impact we have. I understand the question. It's really important that we are having a positive impact in communities right across the UK.

45:07John Boumphrey:Do you think you'll be more transparent about specifically the corporation tax that you pay in the UK and the profits that you make from selling products to people around the UK? Well, when I joined the business, we didn't really talk at all about tax. In 2018, we started producing a report. Go back a few years and we've now started benchmarking it using a PWC. We've been on a journey of getting more and more transparent. The challenge to be candid about using corporation taxes, that's a number that fluctuates. And it's a number that can get taken out of context. It might go up one year, it might go down one year.

45:45John Boumphrey:You can let everybody else worry about that though. That's what businesses around the UK, that's how it works. But if you're in high investment mode, which we are, that changes a lot and it can get taken out of context. So what we choose to do is publish the total number. And so people can see what that total contribution is. We've been on a journey of being more transparent. But as I say, our contribution isn't just the tax we pay. It's also those jobs that we're creating right around the UK. Now, I'd like to ask you to put the headphones on just very briefly, because there was a bit of audio I just wanted to play you that is linked to one of the most popular products that you sell, particularly under the Amazon branding as well.

46:22John Boumphrey:People might be familiar with the Amazon Fire Stick, and this is possibly one of the places they might have heard it mentioned more than most. We've got our prices! We've got our prices! We've got our prices! We've got our prices! So a chant around the football stadiums that are sometimes heard around the UK is football fans talking proudly of the fire stick they own. And the reason that comes up in football circles, sporting circles, is because they are often used for illegal sports streaming. Now, I know that's a sort of the reason we play that is it's for a serious reason. It reflects how ingrained it is in many, many people's lives and homes, therefore the economy and where people are spending their money.

47:12John Boumphrey:When you see that story of the fire stick, you hear how prevalent it is. What's your reaction to that? Well, piracy is illegal. Piracy is terrible for customers because they can get viruses and malware. It's also terrible for the rights holders, the content creators. and Amazon, we're both a retailer and we're also a big player in the creative industries. We film more than 70 titles in the UK with British crews, British talent, British production companies. So I totally get that piracy is illegal and we're doing something about it. We're working, and I should say, it's not a UK issue, it's a global issue.

47:49We're working with a global coalition called the Alliance for Creativity and Entertainment. containment we're identifying those apps that are being used to look at pirated content and we're removing them there's also been a feature called side loading now side loading is where you're able to load something onto a device like a fire tv stick and the reasons is there for a valid reason if you're a developer and you're developing a new version of app you want to test it we have now restricted the ability of customers to do that unless you are a registered developer we're taking really concrete steps to address it because piracy is terrible full stop.

48:29But you could stop it

48:30John Boumphrey:really with all the technology might and intelligence and innovation that we're here in the industry. You could produce a product where this could not be done by homes around the country. Well the new product it can't be done by anyone but we're working very closely with the other partners that we have here to do that and look we get it particularly because we're also big in sport we have rights to champions league we have 13 million customers watch that and of course we recognize the importance of making sure that that is watched legitimately has it been that growth at amazon and amazon prime of sport that has led to a bit more pressure internally perhaps one one major department saying to another can you stop people illegally streaming please because they're using your technology and hindering us is it amazon's presence in that area that has actually focus minds.

49:23No, this is, we've always taken a strong stance on this over many years across all of the creative industries. And that hasn't influenced our thinking. John Bamfrey, Country Manager of the United Kingdom for Amazon. Thank you very much for your time. Thank you, Sean.

49:43So that was Sean Farrington talking to John Bamfrey. What a wide ranging chat for a just enormously wide-ranging business. Remember, if you've enjoyed this, we've got loads more. You can go onto BBC Sounds and subscribe or wherever you get your podcasts, and then you won't miss one. And if it's a subject or a boss you think we should be talking to, then get in touch and let us know. The email address is bigbossatbbc.co.uk. Could ending the war in Lebanon hold the key for a deal between the United States and Iran? I'm Tristan Redman. And I'm Asma Khaled. And together we host the Global Story podcast from the BBC.

50:23Talks to end the war have stalled, with Iran's insistence on an end to the war in Lebanon a sticking point. Why is the war in Lebanon so hard to stop? For more, listen to the Global Story on bbc.com or wherever you get your pods.