Amazon may now have too much warehouse space as the e-commerce craze fueled by the pandemic has cooled.
According to sources reported by , the retail giant could start subletting over 10 million square feet of space and potentially release even more by ending leases with landlords Bloomberg.
The excess space issues are affecting warehouses in New York, New Jersey, Southern California and Atlanta, according to the anonymous sources.
how big is the problem
Amazon’s excess space problem could exceed 10 million square feet, according to two sources, with one source claiming it could be three times that.
Amazon didn’t comment on the exact amount of excess space, but Amazon spokeswoman Alisa Carroll said so Associated Press The move will “relieve the financial obligations associated with an existing building that no longer meets its needs.”
“Subletting is something a lot of established companies do to manage their real estate portfolio,” added Carroll.
The reports come as Amazon appears to be adjusting to a post-pandemic slower growth atmosphere
The news comes after Amazon reported a net loss of $3.8 billion in the first quarter of the year, the first since 2015, compared with income of $8.1 billion for the same period in 2021.
However, revenue rose 7% to $116.4 billion in the quarter, compared to growth of 44% for the same period in 2021.
However, Amazon’s cloud-hosting division, Amazon Web Services (AWS), performed exceptionally, reporting 32% revenue growth in the first quarter.
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“Today, as we no longer seek physical or human capacity, our teams are fully focused on improving productivity and cost efficiencies across our fulfillment network,” CEO Andy Jassy said in Amazon’s latest earnings report. “We know how to do this and have done it before.”
“This may take time, particularly as we work our way through ongoing inflation and supply chain pressures, but we are seeing encouraging progress across a number of dimensions of customer experience, including delivery speed performance, as we now approach levels seen for the immediately preceding months was no longer reached by the pandemic in early 2020.”
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Above: Bloomberg (opens in new tab)
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