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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[Ed's Comment: AC Friendly withdrawn.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: 2) by pdfernhout on Saturday July 09 2022, @04:47PM

    by pdfernhout (5984) on Saturday July 09 2022, @04:47PM (#1259191) Homepage

    https://web.archive.org/web/20131130191257/http://www.shirky.com/writings/group_enemy.html [archive.org]
    "So these are human patterns that have shown up on the Internet, not because of the software, but because it's being used by humans. Bion has identified this possibility of groups sandbagging their sophisticated goals with these basic urges. And what he finally came to, in analyzing this tension, is that group structure is necessary. Robert's Rules of Order are necessary. Constitutions are necessary. Norms, rituals, laws, the whole list of ways that we say, out of the universe of possible behaviors, we're going to draw a relatively small circle around the acceptable ones.
                He said the group structure is necessary to defend the group from itself. Group structure exists to keep a group on target, on track, on message, on charter, whatever. To keep a group focused on its own sophisticated goals and to keep a group from sliding into these basic patterns. Group structure defends the group from the action of its own members. ...
                    This pattern has happened over and over and over again. Someone built the system, they assumed certain user behaviors. The users came on and exhibited different behaviors. And the people running the system discovered to their horror that the technological and social issues could not in fact be decoupled. ..."

    Previously posted here: https://soylentnews.org/comments.pl?sid=50120&cid=1257270 [soylentnews.org]

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