Amazon moving forward with plans to open Sioux Falls fulfillment center
Company had said it was delaying expansion nationwide but a company spokesperson said Thursday that hiring will start now with plans to be full launched by early next year.
SIOUX FALLS, S.D. — Amazon is moving forward with plans to open a massive fulfillment center in Sioux Falls ending speculation about delays as the company has slowed expansion nationwide.
The company built a five-story warehouse on the city’s northern edge with plans to hire up to 1,000 workers. Earlier this year, slowing revenues coming out of the pandemic prompted Amazon to scale back expansion plans, including in Sioux Falls.
But a company spokesperson said Thursday, Sept. 22, that Amazon is now hiring for positions at the Sioux Falls fulfillment center.
“In a few weeks our fulfillment center in Sioux Falls will begin initial operations with the intent of ramping up and launching next year,” regional spokesperson Scott Seroka said in a statement. “We are now hiring for various jobs at this facility – all of which offer at least $15.50 per hour and comprehensive benefits.”
In April, Chief Financial Officer Brian Olsavsky told reporters and analysts that Amazon will spend less on fulfillment projects than in 2021. The pandemic-driven surge in at-home shopping had driven the need for expansion. As that demand eased, and inflation began to increase expenses, the company throttled those plans.
The company was "overbuilt for current demand," Olsavsky said at the time. "Many of the build decisions were made 18 to 24 months ago, so there are limitations on what we can adjust mid-year."
It’s unclear what, if anything, has changed Amazon’s overall expansion strategy.
What is clear is that hiring continues to be a challenge.
The July unemployment rate was 1.7% in the Sioux Falls metropolitan area, near record lows, according to the U.S. Bureau of Labor Statistics.
There’s no denying there is a shortage of workers, said Jeff Griffin, president and CEO of the Greater Sioux Falls Chamber of Commerce. That doesn’t mean a city should stop growing.
But it’s going to require some in-migration from surrounding states and other parts of the country to make that happen, he said.
Sioux Falls is in a good position to attract qualified workers, Griffin said.
“We’re optimistic,” he said. “The workers will come, the recruitment will happen. The country has proved to have a nomadic workforce.”
It’s unclear how many employees Amazon will hire at the outset and whether the original plan for around 1,000 is still part of the near-term plan. Officials didn't comment beyond Thursday’s announcement.
Mayor Paul TenHaken has expressed concern about housing availability in the city as it relates to Wholestone Farms, the farmer-owned cooperative that plans to hire 1,000 workers for a pork processing plant in the city.
TenHaken did not express that same concern in 2020 when Amazon first announced its Sioux Falls plan.
“We are proud to have been selected by Amazon as their next fulfillment center location. Amazon’s decision to invest in our community reflects the company’s confidence in Sioux Falls’ economic climate and excellent workforce,” he said in a statement at the time.
In terms of the labor market, the free market will work if the opportunities are there, Griffin said. However, there are things that can be done, policies that could change to help the process along.
One of those is to make legal immigration from other countries more attainable for people who want to come here. That’s a politically sensitive conversation but it’s important to separate the debate over the southern border with the need to have people to fill jobs.
“It’s difficult politically because those issues get blended together,” he said.
The alternative is living somewhere that’s losing jobs. Trying to solve challenges such as housing availability and affordability so residents can work and raise their families is a much better place to be, he said.
“None of us have lived in 2022 before,” he said. “Between the housing and the workforce we are writing the history for the next 20 years.”
“It’s going to take years to settle down.”