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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[Ed's Comment: AC Friendly withdrawn.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: 0) by Anonymous Coward on Thursday July 07 2022, @05:54AM (1 child)

    by Anonymous Coward on Thursday July 07 2022, @05:54AM (#1258633)

    AC Friendly is a staff-run sock puppet! Ban it now! :-)

    In all seriousness, I just have a friendly suggestion to make. It might be worth either 1) boosting the account's karma somehow (edit the db?) so entries appear in the recent journals rehashbox (is that the right term?) on the front page and/or 2) adding a note on articles that don't permit AC posts linking to the AC Friendly journal entries. I suspect that a lot of people who might choose to post AC just aren't aware of it. This could even be done with a quick edit to articles that have already posted. I think if people know about the account, you'll get some discussion. I've been reading fairly closely the past few days and I only learned of it spending far too much time reading comments. I think people will post there if they know about it, but I bet many just aren't aware of those journals.

  • (Score: 2) by janrinok on Thursday July 07 2022, @07:09AM

    by janrinok (52) Subscriber Badge on Thursday July 07 2022, @07:09AM (#1258640) Journal

    I appreciate the humour - we need a few more laughs around the place. It is possible to create accounts that are used by bots or, in this case, for specific purposes. They do not get moderation points and have other restrictions placed upon them too.

    I am not interested in knowing who people are or where they live. My interest starts and stops at our servers.