Reduced holiday temp hiring is a sign Amazon is turning to more automation and robots: Citi

Key Points
  • Amazon plans to make 20,000 fewer holiday hires this year because robots are "more efficient," internet analyst Mark May says.
  • This is the "first time on record they'll actually hire fewer this holiday season than a year ago," May adds.
Citi's October tech jobs report
Citi's October tech jobs report

Amazon has reduced the number of temporary hires it needs this holiday shopping season as the company turns to more robots, Citi analyst Mark May told CNBC Friday.

"We've seen an acceleration in the use of robots within their fulfillment centers and that has corresponded with fewer and fewer workers that they're hiring around the holidays," the internet analyst said on "Squawk Alley."

With the robotic additions, the 2017 holiday season marked the first time that temporary hires at Amazon was flat from the year prior.

The internet giant expects to hire 100,000 seasonal workers this go around, 20,000 less than last year, May said.

This is the "first time on record they'll actually hire fewer this holiday season than a year ago," he said. "[This] corresponds very closely with the use of robots and automation within their facilities."

Hiring can help analysts predict expense growth at companies, May said, "which has become an important theme within the internet sector."

Robots and automation, which the Seattle-based company began adding to its warehouses about three years ago, "are making them more efficient," May explained.

Amazon provided a statement to CNBC about its holiday hiring plans and automation:

"Since the last holiday season, we've focused on more ongoing full-time hiring in our fulfillment centers and other facilities. Overall, we are proud to have created over 130,000 new jobs in the last year alone. In last year's hiring release, we shared we were hiring for 120,000 seasonal associates to join our team of 125,000 full-time fulfillment center employees. This year, we have 250,000 hourly workers and will be hiring for 100,000 seasonal associates – which shows hiring overall has increased with more of a focus on full-time regular employment in the fulfillment centers.

"It's a myth that automation replaces jobs and destroys net job growth. Automation increases productivity and in some cases increases consumer demand, which also creates more jobs. Automation makes the jobs in our fulfillment center more efficient and allows associates to redirect their focus to other tasks. Since the time we started introducing robotics at Amazon in 2012, we have added nearly 300,000 full-time jobs globally. Our teams work alongside more than 100,000 robots at over 26 fulfilment centers worldwide and we are excited to continue increasing the technology we use at our sites while growing our global workforce."

Amazon is still in the decision process on which city to pick for its second headquarters. Founder and CEO Jeff Bezos expects to choose a place by the end of the year.

The company has said its so-called HQ2 would bring 50,000 new jobs.