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Amazon - A Not-So-Merry Christmas
Posted by: Patodia Umang (IP Logged)
Date: December 16, 2013 01:58PM

Christmas is one of the peak seasons for shopping where people shop their heart out. Most of the companies try to give the best possible offers to lure more and more customers towards them, especially the online websites. The Internet mammoth Amazon (AMZN) will need to rethink its strategies for Christmas this year, as the employees in Germany are going on strike as depicted by the Verdi union.

The Verdi union said workers would strike at Amazon's logistic centers in Bad Hersfeld and Leipzig and also in Graben. Next, they will target Seattle – Amazon’s headquarters – on Monday. On Tuesday, the strike continues in Werne. They are trying to convince the top management to match the payment terms which they believe is biased and not justified in comparison with the other centers. The union believes that the distinction of payment is based on the fact that these workers are Logistic workers and a lower term of payment is not justified.

On the other hand, Amazon is on a hiring spree as it has planned to hire 15,000 extra staff to meet the requirements for Christmas. Amazon Europe's vice president Tim Collins said that these temporary staffs would become permanent staffs.

The battle between management and staff could prove vital for the year-end performance. One side is they need extra staff to meet the requirements, and on the other side, the existing pool of around 9,000 workers is planning to strike. Amazon’s management better try to resolve these union issues or else this would prove to be a golden opportunity for its competitors, especially eBay (eBay). eBay is using Facebook (FB) and its database to help users select the appropriate gift with the development of its eBay Gift Engine. eBay will surely keep a close eye on this activity to ensure it can leverage the maximum out of it.

Way Out?

Management, on the other hand, believes that these workers classified as "logistics workers" are already paid above average as compared to the industry standards. This conflict of interest could prove trivial and thus they need to look into this matter seriously. They need not only to ensure that they can come up with a reasonable solution but also come up with it very fast, as the union has planned very strategically to strike at a time when the company needs its employees the most. This has already given Verdi an upper hand on the possible round table discussions.

With Christmas closing in, the expectations of customers shopping online is not only to get a good deal but also to get the gifts and items on time. This will test the mettle of all these online websites to ensure customer satisfaction. Will Amazon be able to resolve these problems? Or will eBay have the last laugh?

Stocks Discussed: AMZN, FB, EBAY,
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