Amazon overstocked on warehouses. Any closings planned at Delaware sites?

While Amazon is closing some warehouses and delaying construction of others, no Delaware sites are in danger.

By email, the company said it has no current plans to alter its “operational footprint” in Delaware, which includes fulfillment centers in Wilmington, New Castle and Middletown; a Prime Now fulfillment center in New Castle; and delivery stations in Seaford and Wilmington.

Amazon declined to comment on a new warehouse facility near Delaware City near Bear-Corbitt Road (Route 7) other than to say it’s not operational. The company wouldn't give an approximate opening date or an estimate for how many employees would work there.

Amazon employs about 7,000 people in the state at the following sites:

• A 200,000-square-foot center in New Castle that opened about 25 years ago.

• A 1.2-million-square-foot fulfillment center in Middletown.

• A massive, five-story 3.8-million-square-foot facility that opened last year on Boxwood Road near Newport.

• Three smaller sites, one warehouse specifically for Prime Now orders and two for “last mile” delivery centers.

The closest sites to Delaware that are closing are delivery stations in Essex and Hanover, Maryland, and Bellmawr, New Jersey. The company said those were older sites and their operations were transferred to newer delivery stations nearby.

“Local leaders at each site worked with employees to offer employment at other nearby sites,” Amazon said.

Another delivery station that was canceled in Egg Harbor, New Jersey, never got past initial planning, Amazon said.

Pandemic problem

After expanding its warehouse network as online sales surged during the pandemic, Amazon has delayed or canceled the launch of over a dozen warehouses across the country, a company spokesperson confirmed for USA Today.

The freight industry trade publication FreightWaves reported that Amazon had canceled or delayed plans for opening at least 16 warehouse facilities in 12 states this year, and the company confirmed those numbers for USA Today.

"In total, Amazon has canceled, closed, delayed or put on hold more than 40 centers across the country, according to supply chain consultancy MWPVL International," FreightWaves reports.

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In an email, Amazon spokesperson Alisa Carroll said the company weighs a variety of factors when deciding where to develop future sites to best serve customers.

“We have dozens of fulfillment centers, sortation centers and delivery stations under construction and evolving around the world. It’s common for us to explore multiple locations simultaneously and adjust timetables based on needs across the network," Carroll said.

Why is Amazon closing buildings?

In the first quarter of the year, Amazon reported a $3.84 billion loss.

Amazon chief financial officer Brian Olsavsky said during an April 28 earnings conference call that, with the emergence of the omicron variant, many fulfillment network employees went on leave and the company hired new workers to cover the absences.

“As the variant subsided in the second half of the quarter and employees returned from leave, we quickly transitioned from being understaffed to being overstaffed, resulting in lower productivity,” Olsavsky said. “This lower productivity added approximately $2 billion in costs compared to last year.”

In the second quarter, the company reported revenue of $121.2 billion, up 7% from a year earlier, but after expenses, the result was a net loss of $2 billion.

In the second quarter, CNBC said Amazon cut about 99,000 positions, about 6.1% of its workforce, bringing its employee count to about 1.52 million people.

The company almost doubled the square footage of its centers from about 272 million square feet at the end of 2019 to about 525 million square feet by the end of 2021, CNBC said.

fulfillment center:With 3,000 employed at Boxwood mega-warehouse, Amazon's Delaware presence continues to grow

Company growing in multiple areas

Revising the plan for warehouses is just one part of Amazon’s multifaceted business.

“While we’re closing some of our older sites, we’re also enhancing some of our facilities, and we continue to open new sites as well,” said an Amazon representative. “In fact, since 2020, we’ve added more than 350 new modern facilities to our network in the U.S. alone and have dozens more facilities under construction here in the U.S. and around the world.”

One of those warehouses scheduled to open is the company’s largest ever, a 4-million-square-foot facility in California.

Amazon reported its best Prime Day sale ever July 12 and 13, when members purchased more than 300 million items worldwide.

The company’s AWS business (Amazon Web Services) brought in $18.44 billion in revenue in the first quarter, about 16% of Amazon’s total revenue, according to CNBC.

Plus the company’s new NFL football streaming on Prime Video has provided another source of revenue from subscriptions and advertising.

According to TechCrunch, Amazon reported a record number of Prime Video subscriptions with the start of NFL Thursday Night Football.

Reporter Ben Mace covers real estate, housing and development news. Reach him at rmace@gannett.com.

This article originally appeared on Delaware News Journal: Amazon overstocked on warehouse space. Any changes in Delaware?