After adding more buildings to its network to meet a surge in e- commerce demand, Amazon is paring back its warehouse footprint.
MWPVL International, a supply chain and logistics consulting firm that closely tracks Amazon's distribution network, says that the retail giant has closed or canceled 44 facilities as of this week.
This map shows the locations that have been shuttered and the locations that have been canceled or delayed. Delivery stations are closing at a higher rate than any other type of facility.
Between 2020 and 2022, Amazon embarked on a building binge as it raced to keep up with a flurry of online orders as the Covid epidemic kept millions of people at home. At the end of the year, the company's footprint was over 500 million square feet.
Inflation-weary consumers reduced their spending online and also returned to shopping in stores as e- commerce activity began to slow. CFO Brian Olsavsky said in April that Amazon had too much space.
The company is rethinking its scale at every step of its fulfillment network, from the massive warehouses that pick, pack and ship orders to the smaller, last-mile delivery stations that are the final stop before packages are dropped off.
Amazon relies on drivers to deliver packages. Third-party companies that are part of Amazon's delivery service partner program are employing the drivers. More than 225,000 drivers are employed by 3,500 companies in the program.
As a result of the facility closings, it is not known how many employees will be laid off.
The option to transfer to nearby facilities appears to have been given to some drivers by Amazon.
There are at least two facilities that have laid off workers. A Worker Adjustment and Retraining Notification was filed late last month by Amazon that will result in 190 layoffs at a delivery station in Maryland.
163 employees will be let go from a delivery station in Maryland, according to a separate WARN notice.
The layoffs are expected to start in October.
Andy Jassy pledged to return to a "healthy level of profitability" after rising costs and slowing retail sales took a toll on the company's earnings. After going on a hiring spree, Amazon is having a hard time finding enough workers. 99,000 people were cut from Amazon's workforce in the second quarter.
Amazon continues to open new facilities even as it trims its physical footprint The company was given the go-ahead to build a 3.1 million square foot warehouse in New York.
The largest warehouse in the company's history is being built in Ontario, Calif., along with a site in Colorado.
Representatives from Amazon didn't reply to a request for comment on the changes to its warehouse network.
There is a documentary about the rapid growth of Amazon Logistics and how it is taking on third-party shipping.
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