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posted by janrinok on Tuesday July 05 2022, @08:14PM   Printer-friendly

Amazon Cancels Or Delays Plans For At Least 16 Warehouses This Year:

After spending billions doubling the size of its fulfillment network during the pandemic, Amazon finds itself in a perilous position.

In the first quarter of 2022, the e-commerce giant reported a $3.8 billion net loss after raking in an $8.1 billion profit in Q1 2021. That includes $6 billion in added costs — the bulk of which can be traced back to that same fulfillment network.

Amazon (NASDAQ: AMZN) CFO Brian Olsavsky said the company chose to expand its warehouse network based on "the high end of a very volatile demand outlook." So far this year, though, it has shut down or delayed plans for at least 16 scheduled facilities.

"We currently have some excess capacity in the network that we need to grow into," Olsavsky told investors on Amazon's Q1 2022 earnings call. "So, we've brought down our build expectations. Note again that many of the build decisions were made 18 to 24 months ago, so there are limitations on what we can adjust midyear."

[...] If you're wondering how that's possible, consider Amazon's unmatched turnover rate. A New York Times investigation uncovered that even before the pandemic, it was as high as 150%. That means there are more employees leaving Amazon warehouses each year than there are being hired.

[Ed's Comment: AC Friendly withdrawn. You can blame you-know-who for the spamming]

In fact, there has been so much turnover that Amazon began tracking it weekly and found it loses an estimated 3% of its warehouse workers every seven days. That means the e-commerce powerhouse sifts through its entire supply of warehouse labor every eight months on average.

Simply put, the strategy isn't sustainable long term. Still, Wulfraat believes Amazon can weather the storm.

"It will take some time to iron out the wrinkles, but they will get through it," he told Supply Chain Dive.

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  • (Score: 3, Informative) by sjames on Tuesday July 05 2022, @08:27PM (4 children)

    by sjames (2882) on Tuesday July 05 2022, @08:27PM (#1258363) Journal

    More pay. Be nicer to employees. Less penis rockets.

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  • (Score: 2) by Freeman on Wednesday July 06 2022, @03:06PM (3 children)

    by Freeman (732) on Wednesday July 06 2022, @03:06PM (#1258533) Journal

    All things considered, Jeff Bezos's "penis rockets", have nothing to do with Amazon. Blue Origin is an entirely separate entity and Jeff Bezos is no longer the CEO of Amazon. []

    On July 5, 2021, Bezos stepped down as the CEO of Amazon and transitioned into the role of executive chairman; Andy Jassy, the chief of Amazon's cloud computing division,[11][12] replaced Bezos as the CEO of Amazon. On July 20, 2021, he flew to space alongside his brother Mark.[13] The suborbital flight lasted over 10 minutes, reaching a peak altitude of 66.5 miles (107.0 km).[14]

    At some point, you have to stop blaming him for everything, when he's no longer the CEO. It'd kind of be like blaming all of Microsoft's current problems on Bill Gates. Sure, you can do that, but no one who has their head screwed on straight will be listening to you.

    Joshua 1:9 "Be strong and of a good courage; be not afraid, neither be thou dismayed: for the Lord thy God is with thee"
    • (Score: 3, Touché) by sjames on Wednesday July 06 2022, @08:51PM

      by sjames (2882) on Wednesday July 06 2022, @08:51PM (#1258563) Journal

      Bill Gates moved past the point of major blame when he fully exited MS's board. Bezos hasn't gotten there yet.

    • (Score: 2) by higuita on Wednesday July 06 2022, @08:57PM (1 child)

      by higuita (2465) on Wednesday July 06 2022, @08:57PM (#1258565)

      we can still blame them for the business culture they build for all the years in power... and of course, they still own a major chunk of the company, so yes, they opinion is still important, while not managing it directly

      now business culture is a difficult thing to change... yet google managed to do that, from the "don't be evil" to the "be evil, just like all other huge companies"

      • (Score: 2, Touché) by Anonymous Coward on Wednesday July 06 2022, @09:18PM

        by Anonymous Coward on Wednesday July 06 2022, @09:18PM (#1258568)

        Change for the worse is almost always easier than change for the better.