Amazon is shrinking its warehouse footprint across the country after aggressively adding more buildings to its network to meet increased e-commerce demand driven by the pandemic.
The retail giant has closed or canceled 44 facilities and postponed the opening of 25 as of this week, according to MWPVL International, a supply chain and logistics consultancy that closely follows Amazon’s distribution network.
This map shows where Amazon has closed locations, and where it has canceled or delayed the launch of new facilities. More delivery stations are closed than any other type of facility.
Amazon embarked on a building journey between 2020 and 2022 as it raced to keep up with the wave of online orders as the Covid pandemic kept millions of people at home. The company’s area has nearly doubled from approximately 272 million square feet at the end of 2019 to more than 525 million square feet at the end of 2021.
By early 2022, e-commerce activity began to slow, as inflation-exhausted consumers cut back on their online spending and also returned to shopping in stores. Amazon found itself saddled with “a lot of space… against our demand patterns,” Chief Financial Officer Brian Olsavsky told reporters in April.
The company is now rethinking its scale at every step of its fulfillment network, from the huge warehouses picking, packing and shipping orders, to the smaller delivery stations that are the last stop before packages are delivered at shoppers’ doors.
Amazon relies on legions of contract drivers to expedite packages to customers. Drivers are employed by third-party companies that are part of the Amazon Delivery Partner Program, which was launched in 2018. The program now includes 3,500 companies that employ 275,000 drivers globally.
It is unclear how many employees will be laid off as a result of the facility closure.
Amazon appears to have given some drivers the option of commuting to nearby facilities, according to a post on the popular Reddit group of delivery drivers.
Amazon said 190 employees will lose their current positions as the company shuts down a delivery station in Hanover, Maryland, based on an Adjustment Notice and Retraining Notice (WARN) filing late last month. Another 163 employees will be affected by the closing of a delivery station in Essex, Maryland, according to a separate warning notice provided by Amazon.
Closures are set to begin October 25, according to the filings. In a statement, Amazon said, “Maryland law requires that a warning notice be served when a facility closes — even if you intend to maintain the workforce at other facilities. No Maryland employees have been laid off and every employee has been offered a position at a nearby facility.”
The cuts come as CEO Andy Gacy vowed to return to a “healthy level of profitability” after rising costs and slowing retail sales hit the company’s earnings. Amazon is also struggling with too many workers after being hit by a hiring spree. In the second quarter, Amazon reduced its number of employees from 99,000 to 1.52 million
Even as Amazon shrinks its physical footprint, it continues to open new facilities in some markets. In July, the company received approval from officials in Niagara, New York, to build a 3.1 million square foot warehouse.
The company is also building a site in Loveland, Colorado, as well as a 4 million-square-foot warehouse in Ontario, California, its largest ever.
In a statement, an Amazon representative said, “As we close some of our older locations, we’re also improving some of our facilities, and we continue to open new ones as well. In fact, since 2020, we’ve added more than 350 new modern facilities to our network in the US alone and have dozens of Other facilities are under construction here in the United States and around the world.”
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