According to a well respected consulting firm, Amazon.com Inc. has abandoned dozens of existing and planned sites around the US in an effort to scale back the size of its bloated delivery operation amid sluggish sales growth.
According to MWPVL International Inc., which monitors Amazon's real estate footprint, the business has either closed 42 sites or abandoned plans to build new ones with a combined usable area of about 25 million square feet. According to MWPVL, the company has postponed opening an additional 21 facilities totaling close to 28 million square feet.
Just last week, Amazon gave Maryland officials notice that it intends to close two delivery locations in Hanover and Essex, close to Baltimore, that employ more than 300 workers, beginning in the following month.
According to Marc Wulfraat, the founder and president of MWPVL, "there is some substantial downsizing to do before year-end — in North America and the rest of the world." Despite this, they continue to open additional facilities at an incredible rate this year.
CEO Andy Jassy has promised to roll back some of the pandemic-era expansion that left Amazon with an excess of warehouse space and an excessive number of people. By leaving available positions, delaying hiring, and raising productivity or disciplinary standards, the corporation has traditionally weaned its ranks of hourly labour.
However, warehouse closures are also a factor, and employees are preparing for more. The largest quarter-to-quarter reduction in business history, Amazon's workforce decreased by about 100,000 positions during the second quarter to reach 1.52 million.
Amazon responded to the pandemic's online surge of homebound buyers by rapidly expanding its logistics network over a two-year span, outpacing rivals and partners like Walmart Inc., United Parcel Service Inc., and FedEx Corp. Approximately every 24 hours, Amazon used to open a new warehouse in the United States.
It's difficult to predict how much excess capacity Amazon needs to clear, but some analysts think the additional room will be useful during the Christmas shopping season.