Christmas Crunch Looming, Amazon Shifts Seattle Workers to Nevada

The e-tailer, which was caught unprepared last year, makes a warehouse move that raises readiness questions.
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SAN FRANCISCO -- Holiday gifts aren't the only thing

Amazon.com

(AMZN) - Get Report

is shipping this season. The giant Internet retailer says it's been sending some of its Seattle-based employees to a Nevada distribution center to meet a worker shortage there.

The move could indicate that once again Amazon has too few resources to meet surging demand. Last Christmas, Amazon had to put executives and office workers to work packing boxes and answering customer email, according to

The New York Times

. And it's made a huge bet on this Christmas, as it beefed up its site with additional offerings.

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Amazon stock has jumped recently, in part thanks to a surge in tech investing, but also on high Christmas expectations. It's up about 24% since the beginning of November, topping the

Nasdaq's

20% gain. It was trading at 85 5/8, off 2 1/8 Tuesday.

So any signal that it once again planned poorly could spook investors.

"It's not a positive. I don't see how it could be," says Tom Courtney, an analyst at

Banc of America Securities

who downgraded the stock last month to market performer from buy. His firm has not performed underwriting for the company. "Either they couldn't hire enough people or they underplanned."

"It's a tough hiring environment for everybody," adds Glen Kacher, an analyst at former Amazon shareholder

Integral Capital Partners

. "My guess is that this means business is ahead of whatever they were planning."

Amazon declined to say how many workers from its home office were being sent to wrap gifts and ship orders in its facilities in Fernley, Nev., which is about 40 miles east of Reno. The temporary relocations started out as a voluntary effort to help meet order demand. When the need went unmet, the company started assigning individuals with some flexibility in their schedules.

"Everybody's an owner, and we all share the responsibility," says company spokesman Bill Curry. Amazon wouldn't elaborate on the issues it was facing.

With the U.S. unemployment rate treading near a 28-year low, some companies can't hire enough staff to keep businesses running smoothly. Retailers are especially sensitive to hiring squeezes during the holidays.

Federated Department Stores'

(FD)

Fingerhut

division, which ships packages for some online firms, told

Reuters

last Friday that it too was having trouble hiring enough seasonal workers.

Online retailers have been

gearing up for the holiday blitz for months. Shoppers are expected to spend $6 billion online this season, racking up an estimated 58,000 transactions a day, according to

Jupiter Communications

.

Amazon has been more aggressive than most, building 3 million square feet in distribution centers to house books, CDs and other stocking stuffers.

The worst of it should be over well ahead of Christmas. At some point, the purchases shift from actual gifts to gift certificates, which won't require staff at the distribution centers, says Curry.

Which means that the relocated Amazon employees should be home for Christmas.

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