02:39 GMT +318 November 2018
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    Amazon’s Splitting Second Headquarters to ‘Destroy’ Jobs

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    Amazon will open not one but two new headquarters, in Long Island City, New York, and in Northern Virginia, according to the Wall Street Journal, which first broke the news Monday, citing a source familiar with the matter.

    Dr. Jack Rasmus, a professor of economics at Saint Mary's College of California and author of "Central Bankers at the End of Their Ropes: Monetary Policy and the Coming Depression," discusses Amazon's curve ball on Radio Sputnik's Loud & Clear.

    ​In September 2017, the world's largest online retailer announced it would invest more than $5 billion to create a second headquarters (its home base is in Seattle) and hire up to 50,000 people. The company received proposals from 238 locations, replete with economic incentives and marketing schemes.

    However, according to Rasmus, the 50,000 figure that Amazon keeps throwing around is a "phony number."

    "This 50,000 numbers is a phony number. When they talk about hiring over 10 years, a lot of the hiring will be offset by a significant reduction of employment at whatever sites they are talking about. Because what kind of company is Amazon? People think it's a warehouse company. No, it's a tech company," Rasmus told host Brian Becker.

    "They are leader in cloud services and in developing drones and artificial intelligence,which according to a [consulting firm] McKinsey study, is going to eliminate 30 percent of jobs over the next 10 years. And so a lot of these jobs they're going to hire in these ‘warehouses' are going to be eliminated by their own technology. Drone technology will eliminate a lot of truck drivers. Artificial intelligence will eliminate tens of millions of jobs eventually. So, they're a job destroyer, not a job creator. The number of jobs that they're going to hire initially is [going to be] offset [by] the number of jobs that they're going to destroy," Rasmus added. 

    An anonymous insider told the Wall Street Journal that under its new plan, Amazon would hire about 25,000 employees in each location in the Long Island City neighborhood of Queens, New York, and in Crystal City, Virginia. One of the main reasons behind its decision to split its new headquarters between two cities is to recruit top talent.

    "This two location idea is interesting, because as a tech company, where are they going to hire these tech workers is the question. One of their locations might hire more warehouse-type employment, and the other one might be more tech employment," Rasmus told Sputnik.

    "Artificial intelligence is a key component of next generation military technology, and that's one of the leading developments that Amazon is part of," Rasmus added.

    "Amazon is one of the leading artificial intelligence companies. We have a big shortage of artificial intelligence engineers in this country, and that's why they're a tech company, and they're going to [choose a location] where they can recruit high-tech workers," Rasmus added. 

    The US Department of Defense (DoD) is currently running a competition to pick a cloud-computing company to store top national-security secrets and other crucial information, Sputnik reported previously.

    The DoD project, known as the Joint Enterprise Defense Infrastructure (JEDI), consists of shifting much of the Pentagon's technology needs to a commercial cloud. Industry observers suggest that Amazon, which won a $600 million cloud contract with the CIA in 2013, may be the Pentagon's top runner. In addition, Amazon has the highest security clearances for its cloud infrastructure.

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