Amazon’s pandemic-fueled warehouse expansion appears to have run its course, and the company is now reportedly scaling back the growth of its operations.
The e-commerce behemoth has closed or scrapped plans for 42 facilities and delayed opening 21 facilities spanning multiple countries over recent weeks as the company readjusts to a post-lockdown reality, consultant firm MWPVL estimated, per Bloomberg.
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“There remains some serious cutting to do before year-end — in North America and the rest of the world,” said Marc Wulfraat, president of MWPVL. “Having said this, they continue to go live with new facilities this year at an astonishing pace.”
During the thick of the pandemic, when millions of consumers were relegated to their homes for fear of contracting or spreading COVID-19, Amazon doubled the capacity of its logistics network over a two-year stretch, per the outlet.
Consumers embarked on an e-commerce spending bonanza during the height of the pandemic, with online consumption jumping 43% in 2020 alone compared to the prior year, according to the U.S. Census Bureau’s Annual Retail Trade Survey.
This proved to be a boon for Amazon, but now that pandemic-era restrictions have eased up, so too has Amazon’s sales growth.
Recently, Amazon announced that it will shut down two delivery stations next month near Baltimore. However, the company emphasized that the roughly 350 employees at those facilities were offered the chance to transfer to a nearby facility with more modernized buildings, per the report.
“It’s common for us to explore multiple locations simultaneously and adjust timetables based on needs across the network,” Amazon spokeswoman Maria Boschetti told the Washington Examiner in a statement.
“We also regularly look at how we can improve the experience for our employees, partners, drivers, and customers, and that includes upgrading our facilities,” she added. “As part of that effort, we will close locations, like delivery stations, and offer all employees the opportunity to transfer to different delivery stations close by.”
Warehouse slim-downs are only part of the equation. Amazon’s total workforce plummeted by nearly 100,000 during the second quarter, marking the largest contraction from quarter to quarter in Amazon’s history, according to the outlet.
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Reports of the company shrinking its facilities come ahead of the holiday season, in which it generally increases its capacity to meet roaring consumer demands.
Amazon’s relations with labor have soured in recent years. On Thursday, a judge ruled that a vote establishing a union at a New York warehouse was legitimate, spurning the company’s assertions that the vote should be overturned.
