Amazon Rush To Sell Warehouses As Online Shopping Dwindles
Online shopping has decreased in popularity as global lockdowns due to the COVID-19 pandemic are lifted worldwide. As a result, e-commerce giant Amazon are looking to offload excess warehouse space that they acquired to meet pandemic demands.
Amazon reportedly could have over 10 million square feet of extra warehouse space, with once source going as far as to say it could be three times that, according to a report by Bloomberg. This equates to at least 5% of the warehouse space the company acquired during the pandemic.
Amazon have not confirmed how much space they are looking to ditch, however Amazon Spokesperson Alisa Carrol stated that offloading the excess storage will “relieve the financial obligations associated with an existing building that no longer meets its needs.”
“Subleasing is something many established corporations do to help manage their real estate portfolio,” she said, in an interview with the Associated Press.
Amazon reported a net loss of $3.8 billion USD ($5.36 billion AUD) in the first quarter of this year, which compared to an $8.1 billion USD ($11.42 billion AUD) income the same time last year, reflects the decline in growth as the pandemic and related lockdowns come to an end.
CEO Andy Jassy stated that the cost of excess warehouse space in Q1 2022 was around $2 billion USD ($2.82 billion AUD).
That being said, Amazon Web Services, the companies cloud hosting division saw 32% revenue growth at the same time.
In their latest earning’s report, Jassy said “Today, as we’re no longer chasing physical or staffing capacity, our teams are squarely focused on improving productivity and cost efficiencies throughout our fulfillment network.”
“This may take some time, particularly as we work through ongoing inflationary and supply chain pressures, but we see encouraging progress on a number of customer experience dimensions, including delivery speed performance as we’re now approaching levels not seen since the months immediately preceding the pandemic in early 2020.”