Amazon will sublet some of its warehouses as sales have fallen from the high levels the company saw during the height of the COVID-19 pandemic.
Spokeswoman Alisa Carroll said subletting allows the company to “relieve the financial obligations associated with an existing building” that no longer meets its needs.
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According to The Wall Street Journal, Amazon plans to sublet at least 10 million square feet of warehouse capacity and is exploring options to end or further renegotiate its leases.
The additional space includes facilities in New York, New Jersey, California and Georgia, Bloomberg News reported.
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The decision to cut excess space comes after the company suffered its first quarterly loss in seven years. Amazon reported a drop in demand in April, which hurt its warehouse operations, after about two years of soaring growth fueled by the pandemic.
Amazon added warehouses and workers during the pandemic, to meet increased demand from online shoppers, after the company doubled the size of its operations. But as the world transitioned into post-pandemic life, the company noticed it had too much warehouse space and too many workers.
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“Subletting is something many established companies do to help manage their real estate portfolio,” Carroll said.
The Associated Press contributed to this report.