Amazon closes, abandons plans for dozens of U.S. warehouses

Amazon.com, determined to reduce the size of its sprawling delivery operation amid slowing sales growth, has abandoned dozens of existing and planned facilities around the United States, according to a closely watched consulting firm.

MWPVL International Inc., which tracks Amazon's real-estate footprint, estimates the company has either shuttered or killed plans to open 42 facilities totaling almost 25 million square feet of usable space. The company has delayed opening an additional 21 locations, totaling nearly 28 million square feet, according to MWPVL. The e-commerce giant also has canceled a handful of European projects, mostly in Spain, the firm said.

On Long Island, Amazon is closing one of its two warehouses in Bethpage and transferring about 500 affected employees to a new, larger facility in Syosset and elsewhere in the metropolitan area. The move cost Amazon and the two developers of the Syosset warehouse $11 million in tax breaks because the retailer told the Nassau County Industrial Development Agency that the promised 150 new jobs might not happen.

Amazon has plans for at least nine warehouses, also called delivery stations, in Nassau and Suffolk counties.

Just this week Amazon warned officials in Maryland that it plans to close two delivery stations next month in Hanover and Essex, near Baltimore, that employ more than 300 people. The moves are a striking contrast with previous years, when the world's largest e-commerce company typically entered the fall rushing to open new facilities and hire thousands of workers to prepare for the holiday shopping season.

"There remains some serious cutting to do before year-end — in North America and the rest of the world," said Marc Wulfraat, MWPVL's founder and president. "Having said this, they continue to go live with new facilities this year at an astonishing pace."

Amazon says the Maryland closings are part of an initiative to shift work to more modern buildings. "We regularly look at how we can improve the experience for our employees, partners, drivers and customers, and that includes upgrading our facilities," a spokesperson said. "As part of that effort, we'll be closing our delivery stations in Hanover and Essex and offering all employees the opportunity to transfer to several different delivery stations close by."

The retailer told Newsday the same thing about the Bethpage closure. It didn't have an immediate comment on MWPVL's estimates.

Chief executive Andy Jassy has pledged to unwind part of a pandemic-era expansion that saddled Amazon with a surfeit of warehouse space and too many employees. During the second quarter, Amazon's workforce shrank by roughly 100,000 jobs to 1.52 million, the biggest quarter-to-quarter contraction in the company's history.

The Seattle-based company has also been seeking to sublease at least 10 million square feet of warehouse space, Bloomberg reported in May.

When homebound shoppers stampeded online during the pandemic, Amazon responded by doubling the size of its logistics network over a two-year period, a rapid buildout that exceeded that of rivals and partners like Walmart, United Parcel Service and FedEx.

MWPVL estimates that Amazon operates more than 1,200 logistics facilities, large and small, around the US.

With James T. Madore