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Amazon is reportedly scrapping plans to build dozens of storage facilities across the United States amid sluggish sales growth.
Consulting firm MWPVL says the online retail giant is closing or abandoning plans to open 42 facilities across the country totaling nearly 25 million square feet of usable space. Bloomberg reported.
The firm says that Amazon has also delayed the opening of 21 other locations and canceled several European projects, mainly in Spain.
“Amazon is a dynamic business and we are constantly exploring new locations,” Amazon spokeswoman Maria Boschetti told Fox News Digital. “We weigh a variety of factors when deciding where to develop future sites to better serve customers. We have dozens of fulfillment centers, sorting centers and delivery stations under construction and evolving around the world. It’s common for us to explore multiple locations simultaneously and adjust schedules based on the needs of the entire network.”
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Amazon warehouse with packages and company logo. (Getty Images/Getty Images)
The report comes after it was announced that the company is closure of two delivery stations in Maryland they employ more than 300 people.
Amazon posted its slowest growth rate in more than 20 years in July, but ultimately performed better than expected, sending shares up 12%, the New York Times reported.
“Despite continued inflationary pressures in fuel, power and transportation costs, we are making progress on the more controllable costs we referenced last quarter, particularly improving the productivity of our fulfillment network,” said Andy Jassy, ​​​CEO of Amazon, in a statement. statement at that time.
Amazon will start a warehousing service for sellers called Amazon Warehousing & Distribution (AWD) in an effort to ease supply chain issues. (REUTERS/Gonzalo Fuentes/Reuters Photos)
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Amazon announced earlier this year that it would begin subleasing some storage spaces as online shopping numbers have slowed.
Alisa Carroll Spokesperson such a sublease allows the company to “relieve the financial obligations associated with an existing building” that no longer meets its needs.
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A truck arrives at Amazon’s warehouse facility in the Staten Island borough of New York, on April 1, 2022. Amazon is prohibiting off-duty warehouse workers from entering company facilities, a move that, According to organizers, it can hamper union campaigns. (AP Photo/Eduardo Munoz Alvarez, File/Associated Press)
According to The Wall Street JournalAmazon plans to sublease at least 10 million square feet of storage capacity and is looking at options to end or renegotiate more of its leases.
The additional space includes facilities in New York, New Jersey, California and Georgia, reported Bloomberg News.
Landon Mion of Fox News contributed to this report
