Amazon closes and abandons plans for dozens of warehouses amid slowing sales growth | Local

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Amazon.com, determined to downsize its sprawling delivery operation amid slowing sales growth, has abandoned dozens of existing and planned installations in the United States, according to a closely watched consulting firm.

MWPVL International Inc., which tracks Amazon’s real estate footprint, estimates the company has closed or killed its plans to open 42 facilities totaling nearly 25 million square feet of usable space. The company has delayed the opening of 21 additional locations, totaling nearly 28 million square feet, according to MWPVL. The e-commerce giant has also canceled a handful of European projects, mostly in Spain, the firm said.

Just this week, Amazon warned officials in Maryland that it plans to close two delivery stations next month in Hanover and Essex near Baltimore, which employ more than 300 people. The moves are a stark contrast to years past, when the world’s largest e-commerce company typically entered the fall as it rushed to open new facilities and hire thousands of workers to prepare for shopping season. Holidays. Amazon continues to open facilities where it needs more space to meet customer demand.

“There are still serious cuts to be made before the end of the year – in North America and the rest of the world,” said Marc Wulfraat, founder and president of MWPVL. “That said, they continue to bring new facilities into service this year at an astonishing rate.”

Amazon says the Maryland closures are part of an initiative to move work to more modern buildings. “We regularly review how we can improve the experience for our employees, partners, drivers and customers, and this includes upgrading our facilities,” a spokesperson said in an emailed statement. “As part of this effort, we will be closing our delivery stations in Hanover and Essex and offering all employees the option of relocating to several different delivery stations nearby.” Amazon did not immediately comment on MWPVL’s estimates.

CEO Andy Jassy has pledged to unravel some of a pandemic-era expansion that has plagued Amazon with a glut of warehouse space and too many employees. The company generally weaned its ranks of hourly workers by leaving vacancies open, slowing hiring, and tightening disciplinary or productivity standards. But warehouse closures are also part of the mix, and workers are preparing for more. During the second quarter, Amazon’s workforce shrank by about 100,000 jobs to 1.52 million, the largest quarter-over-quarter contraction in the company’s history.

The Seattle-based company has also sought to sublet at least 10 million square feet of warehouse space, Bloomberg reported in May.

When home shoppers rushed online during the pandemic, Amazon responded by doubling the size of its logistics network over a two-year period, a rapid build that outpaced competitors and partners like Walmart, United Parcel Service and FedEx. For a while, Amazon was opening a new warehouse somewhere in the United States about every 24 hours. Jassy told Bloomberg in June that the company decided in early 2021 to focus on the top of its forecast for buyer demand, preferring to have too much warehouse space rather than too little.

Wulfraat said most of the closures announced this year are delivery stations, smaller buildings that deliver already-packaged items to drivers. The facilities that have been canceled include several planned distribution centers, giant warehouses containing millions of items. MWPVL estimates that Amazon operates more than 1,200 logistics facilities, large and small, in the United States.

More belt-tightening could complicate Amazon’s already strained relationship with organized labor. Earlier this year, an upstart union started by a fired Amazon worker won a historic victory at a company warehouse in Staten Island, New York. A federal labor official on Thursday rejected Amazon’s offer to overturn the result. Last month, workers at an Amazon plant near Albany, New York, filed a petition to hold union elections there.

It’s hard to gauge how much overcapacity Amazon has to manage, and some analysts think the extra space will come in handy during the Christmas holiday season.

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