Amazon plans to sublet some of its warehouse space as the pandemic-driven surge in online shopping has slowed
Amazon plans to sublet some of its warehouse space after the pandemic-driven surge in online shopping, which has helped the e-commerce giant to soar in profits over the past two years, has eased.
Subleasing allows the company to “reduce the financial obligations associated with an existing building that no longer meets its needs,” said Amazon spokeswoman Alisa Carroll.
Carroll did not disclose how much space the company intends to sublet. However, citing anonymous sources, Bloomberg News and The Wall Street Journal previously reported that the retailer would sublet at least 10 million square feet of space and could terminate more of its leases in states including New York, New Jersey and California.
Seattle-based Amazon doubled the size of its operations during the pandemic, adding more warehouses and workers to keep up with demand from consumers who were more comfortable buying things online. But as the worst of the pandemic subsided, it found itself with too much storage space and too many workers.
“Subletting is something a lot of established companies do to manage their real estate portfolio,” Carroll said.
Last month, the company reported its first quarterly loss since 2015, fueled by the slowdown in e-commerce and a massive writedown of its investment in electric vehicle startup Rivian Automotive. In a statement released last month with its earnings results, CEO Andy Jassy said the company is now focused on improving productivity.