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Amazon’s $700 Million Training Pledge Is Actually a Bargain

Eric Newcomer

(Bloomberg) -- Amazon.com Inc. is amazing at turning mundane corporate management decisions into global news events.

Many retailers host annual sale events. But Amazon “celebrates” Prime Day. Many chief executives write notes to their shareholders. But Jeff Bezos pens annual letters with “lessons” and “principle themes” and “important words” to behold. Many companies open satellite offices. Amazon “launched” HQ2 with a continent-wide pitch contest. And many companies train their employees. On Thursday, Amazon announced how much it’s spending on workplace training over the next six years: more than $700 million.

Certainly, when a company has a market value near $1 trillion and a workforce of more than 600,000, each move is a bigger deal than a back-to-school sale at an independent bookstore. Yet, even among its technology industry peers, the e-commerce giant seems to have a magic touch, turning run-of-the-mill corporate events into big moments.

As of last year, Google quietly amassed more than 7,000 employees in New York. But when Amazon said it was coming to town, the world was transfixed. And when it abandoned those plans, the governor scrambled. After all the fuss, Amazon ended up sending some workers to New York anyway.

I told you almost two years ago about how Amazon was turning its earnings calls into marketing events and how it deftly used Whole Foods as an opportunity to highlight Amazon’s low, low prices. The company has marketing down pat. That’s not to say Amazon is all talk. The company did raise its minimum pay to $15 an hour last year. That’s real. And surely Amazon will work to retrain its U.S. employees.

But let’s break down the numbers of this training program. Amazon said it’ll spend about $700 million on development for 100,000 employees by 2025. That’s $1,077 a person annually. According to one estimate from the Association for Talent Development, a trade group, the average organization spends $1,296 per employee annually on training. Well, you’ve got to admire Amazon’s commitment to undercutting the competition.

Amazon is a humongous corporation. Training lots of people costs a great deal of money. In a world increasingly worried about monopolies, there’s a curious element to a company seeking praise just for being big.

Bezos isn’t the first technology idol to entrance the world. Steve Jobs was famous for creating a so-called reality distortion field at Apple. Bill Gates recently described his old foe in mystical terms, saying “casting spells” was part of Jobs’s aura. “I would see people mesmerized,” Gates said. “But because I’m a minor wizard, the spells don’t work on me.”

We should all aspire to be minor wizards when it comes to corporate pronouncements. Some claims, like ubiquitous drone delivery by 2018, will fail to materialize. Others are less impressive when you see how the magic trick is performed.

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And here’s what you need to know in global technology news

Train secrets. Authorities charged a software engineer with sending trade secrets from a locomotive manufacturer to a company in China. Meanwhile, Tesla wants Apple’s help chasing other people accused of leaking secrets to China. 

Snapchat was saved by a gender swap app. That’s not a sentence I ever expected to write. 

Facebook bested elite poker players. Or at least an artificial intelligence designed by the company beat them.

To contact the author of this story: Eric Newcomer in New York at enewcomer@bloomberg.net

To contact the editor responsible for this story: Mark Milian at mmilian@bloomberg.net, Anne VanderMey

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