Amazon has either closed or canceled plans for around 42 facilities in the U.S.
Key details
The online giant is closing facilities and has delayed opening 21 locations, reports consulting firm MWPVL International Inc., which monitors Amazon’s business activity.
This week Amazon announced plans to close two delivery stations near Baltimore, Maryland, which together employ 300 people.
A few European facilities have also been scrapped.
Amazon spokesman Maria Boschetti told Bloomberg that companies will frequently invest in multiple locations before deciding which facilities are most needed. Boschetti says that the Maryland closures are part of a plan to move Amazon facilities to more modern buildings.
Amazon has also been looking to sublease around 10 million square feet of warehouse space, Bloomberg reports.
Why it’s news
In previous years, Amazon has ramped up production in the fall season as it prepares for the onslaught of holiday shoppers.
During the pandemic, Amazon expanded rapidly, now leaving the company with an excess of employees and warehouse space. Amazon’s employee headcount was down by 100,000 in the second quarter, a historic number for the company.
Amazon has already faced push backs from employees surrounding labor unions. Cutting back on labor could heat up the already tense relationship.
Labor unions have begun to form in New York facilities, a move Amazon has strongly resisted.
Backing up a bit
Amazon isn’t the only major company cutting back on expenses. A PwC survey found that 50% of businesses surveyed are planning layoffs in the near future.
Apple, Ford Motor, Robinhood, and Peleton are just a few of the major businesses considering layoffs. Major companies like Microsoft, General Motors, and Meta have announced hiring freezes over the last year. Often, hiring freezes are put in place in an effort to avoid layoffs, but it can’t prevent them entirely.
