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Amazon to acquire warehouse automation company Kiva Systems

Amazon has agreed to buy Kiva Systems, a company specialised in automated materials handling in warehouses, the online retailer announced yesterday.

Kiva makes robots and software used for a speedier workflow in warehouses. Amazon will use the warehouse automation technology to improve productivity by bringing products directly to employees who can process them faster. The Kiva technology will be added to the existing warehouse infrastructure, Amazon and Kiva said in a combined press release.

Kiva’s shareholders approved the acquisition and Amazon will pay approximately US$775 million in cash for all of the outstanding shares. The deal is expected to close in the second quarter of 2012.

In its 2011 annual report, Amazon identified its ability to optimise its fulfillment centers and warehouses as one of the risk factors affecting its business.

At the end of last year, it operated about 2.45 million square meters of fulfillment centers in North America, up by 67 percent on a year earlier, and a further 1.64 million square meters elsewhere in the world, up by 71 percent. The expansion continues: In February Amazon opened a new 100,000-square-meter fulfillment center in the U.S. state of Delaware, employing 850.

What the effects of automation will be on Amazon’s growing warehouse workforce remains to be seen. The company typically employs many seasonal workers, especially around the year-end holiday season. Amazon did not reply to a request for comment on possible employee reductions.

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