People were forced to order online with the onset of the pandemic, but in 2022, CoVid bid goodbye, and consumers went back to stores to shop; Amazon found itself with too much space that was more than the demand.
According to the logistics consulting and supply chain firm MWPVL International, which keeps a close watch on Amazon’s distribution network, the company had closed at least 44 units and delayed 25 sites this week.
The map shows where Amazon is closing, canceling, and delaying the new units. The delivery stations are being closed more than any other stations. Workers are removed from two delivery stations, the last stop before the product is delivered to the consumer.
The online retailer has closed at least 20 logistics centers and is delaying or canceling 50 other units. By the end of 2019, the company owned a 272-million-square-feet area; by 2021, they had reached a 525 million-square-feet place. By 2022, with the inflation and pandemic gone, e-commerce business declined, and shoppers started going out and shopping physically. CFO Brian Olsavsky told reporters in April. “Amazon found itself saddled with too much space…versus our demand patterns.”
The company is giving a lot of thought to its operations from the warehouse pickup, packing, shipping, and final stop before delivering to the customer. Amazon has reliable contracted drivers who deliver the products quickly to the destined doorsteps. In 2018, a program was launched in which the drivers are employed by third-party companies that are a part of the Amazon delivery service partner program. It has 3,500 companies hiring 275,000 drivers worldwide.
According to a post on Reddit, Amazon has given the option to the drivers to transfer to the facilities closeby to them. However, it is unclear how many workers will be sacked given the situation.
According to a Worker Adjustment and Retraining Notification submitted last month, Amazon stated that 190 workers would be losing their jobs as a delivery station in Hanover, Maryland, shuts its operations. In another notice, 163 employees may lose their jobs in Essex, Maryland, as they are closing down their delivery station.
According to the filings, the closings will begin on October 25th. The company stated, “Maryland state law requires filing a WARN notice when a facility closes — even if you intend to maintain the workforce at other facilities. No employees were laid off in Maryland, and every one of the employees was offered a position at a nearby facility.”
CEO Andy Jassy has committed to returning to a healthy level of profitability with the inflation and low sales blocking companies’ earnings. Amazon is looking into hiring sprees during the pandemic, shaving its workers count to 99,000 from 1.52 million by the second quarter.
However, Amazon is still opening new centers in new places. For example, a 3.1 million square feet warehouse got approved by the officials in Niagara, New York. An Amazon representative stated, “While we’re closing some of our older sites, we’re also enhancing some of our facilities, and we continue to open new sites. In fact, since 2020, we’ve added more than 350 new modern facilities to our network in the U.S. alone and have dozens more facilities under construction here in the U.S. and around the world.”