Amazon’s Huge Appetite for Workers to Take a Bite Out of Boston

12/14/12Follow @curtwoodward

When Amazon.com purchased Kiva Systems this spring, a lot of people wondered whether the deal might signal an even bigger commitment to the tech scene in Massachusetts.

As of this week, we can say the answer is yes. But it came in kind of a roundabout way.

On Tuesday, Gov. Deval Patrick and Amazon announced they’d reached a political deal that would get Amazon to start collecting sales taxes from Massachusetts shoppers late next year.

That news was a bummer for people who mistakenly thought of tax-free online shopping as a birthright. But the agreement, part of Amazon’s new strategy for promoting a federal online sales-tax law, means the company will also hire more Bay State workers.

A lot more—in a statement announcing their tax deal, both the state and Amazon said the Seattle-based e-commerce and cloud computing behemoth would create “hundreds of high tech jobs in Massachusetts.”

Is that more than just growth at Kiva, which already has more than 300 workers? Most definitely. Amazon has maintained a small cadre of its own employees in the Cambridge Innovation Center for some time—and now, the company is advertising for 60 jobs in Boston, Cambridge, or Woburn on its public job board. They range from electrical engineers at Kiva to speech scientists, software developers, cloud computing specialists, and program managers.

And today, the Boston Globe reports that a long-rumored larger Boston-area Amazon office is close to becoming a reality, citing unnamed sources that peg Amazon’s Kendall Square office-space lease at about 105,000 square feet. Using typical back-of-the-envelope ratios for commercial real estate, you could say that’s enough space to hold about 500 employees.

That kind of expansion won’t surprise anyone who’s watched Amazon’s expansion over the past few years. As the company has moved well beyond its online storefront roots into cloud computing and now digital devices and services, Amazon’s appetite for people has become insatiable.

The company already has perhaps 10,000 workers in its hometown of Seattle, and it’s building a series of huge office towers that could accomodate 12,000 more. Amazon also has been expanding its footprint of shipping centers, which allows it to send goods faster and cheaper. It has some 65,600 full- and part-time workers worldwide.

So, Boston-area startups and smaller tech companies had better get ready for another big competitor on the block—just ask any Seattle tech entrepreneur you know for their recent horror stories of trying to compete with Amazon’s appetite.

There is a possible upside, however: Amazon’s famously hard-driving culture tends to chew people up and spit them out, so other companies could wait to catch those former Amazonians who flee.

One final note about taxes—for Amazon, state sales-tax policies and jobs are inextricably linked. Under existing federal law, states can only force a company to collect sales tax from its residents if the company has some kind of physical presence in the state. In the past, Amazon was very opposed to being deputized as a tax collector all over the country, and  limited its physical offices to a few places.

In the past two years, however, Amazon has started to be more proactive. Instead of just shutting down shipping centers or affiliate marketing networks when threatened with sales-tax enforcement by state officials, the company has begun expanding into states and making deals that draft local politicians to fight for the ultimate goal: a real national online sales-tax policy.

Patrick is now definitely signed up for that campaign. And it looks like Amazon’s part of the deal is bringing its hunger for talent to the Boston area.

Curt Woodward is a senior editor for Xconomy based in Boston. Email: cwoodward@xconomy.com Follow @curtwoodward

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