Enlarge image
Amazon warehouse in Staten Island: Expensive and not needed?
Photo: Eduardo Munoz Avarez/AP
Amazon's business exploded in the corona crisis.
The world's largest online retailer posted record profits.
But now the boom is over.
In the first quarter, the company surprisingly posted losses for the first time since 2015, the growth rates are as low as they were more than 20 years ago - and the share price has also fallen.
In view of this slump, the group is now resorting to unusual means to reduce costs.
Amazon plans to sublet some of its warehouses.
The move allows the company to free itself from the financial obligations associated with an existing building, Amazon spokeswoman Alisa Carroll said.
The building no longer meets the needs.
Aiming for higher productivity
Carroll didn't say how much space the company intends to sublet.
However, Bloomberg News and the Wall Street Journal, citing anonymous sources, reported that the retailer will sublet at least 10 million square feet of space and may terminate other leases in states such as New York, New Jersey and California.
The Seattle-based company had doubled the size of its business operations during the pandemic.
To keep up with the demands of consumers working from home, Amazon has been adding more and more warehouses and employees - and enticing them with higher wages than usual.
This is now costing the group dearly.
In addition, Amazon is also struggling with inflation: consumers' disposable income is falling and deliveries are becoming more expensive.
Spokeswoman Carroll said the downsizing is something many established companies are doing.
The latest loss at Amazon is due to a large write-down for the electric car startup Rivian Automotive, in addition to the flagging online business.
Amazon CEO Andy Jassy recently announced that the company now wants to focus on improving productivity.
Apr/AP
