Why is Amazon Pausing Its Plans to Open Warehouses in U.S.

A company spokesperson confirmed that Amazon.com, Inc. has delayed or canceled the opening of more than a dozen warehouses across the country. During the pandemic, the company expanded its fulfillment network. Amazon’s distribution center in Cocoa, Florida, will not open until at least next year, according to a report from the USA TODAY Network site. The company confirmed to the outlet that the figures were correct. The Cocoa location is in addition to the locations mentioned in the article.

The freight trade commerce publication FreightWaves reported earlier this month that the multinational company had canceled or delayed plans to open no less than 16 warehouse services in 12 states this year. The Wall Street Journal, citing MWPVL data, said that Amazon has canceled, listed for sublease, closed, or put on hold more than 25 delivery stations and fulfillment centers across the United States as deferred opening 15 more.

The e-commerce giant declined to respond to questions about how many new jobs were slated to open in the services that will now not open this year, or how jobs will be impacted by an organization pause in website openings. The company also refused to answer questions about whether it would continue to pay property taxes on the sites or how the local and state subsidies that drew Amazon to each location would now be affected. Amazon did not say whether it intends to reopen all of its paused websites and relaunch them later.

Amazon reported a $3.84 billion monetary loss in the first quarter of the year. During an earnings conference call on April 28, Amazon Chief Financial Officer Brian Olsavsky stated that, with the introduction of the omicron variant, many successful community employees went on leave, and the company hired new staff to cover the absences. As the variant subsided in the second half of the quarter and employees returned from leave, the company quickly transitioned from being understaffed to being overstaffed, resulting in lower productivity, Olsavsky explained. The company reported revenue of $121.2 billion in the second quarter of the year, up 7% from the previous year, but a net loss of $2 billion.

Despite continued inflationary pressures in gasoline, power, and transportation costs, Amazon is making progress on the extra controllable costs, significantly improving productivity, Amazon announced. Despite service delays and closures, Amazon’s plans for a massive distribution center in Niagara, New York, are moving forward, according to local reports.

Image Tedder Wikimedia

 



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