Amazon plans to sublet part of its warehouse now that the pandemic-fueled surge in online shopping, which has helped the e-commerce giant post soaring profits over the past two years, has eased.
Subletting allows the business to “relieve the financial obligations of an existing building that no longer meets” its needs, Amazon spokeswoman Alisa Carroll said.
Carroll did not reveal how much space the company plans to sublet. But citing unnamed sources, Bloomberg News and the Wall Street Journal earlier reported that the retailer would sublet at least 10 million square feet of space and could end more of its leases in states including New York, the New Jersey and California.
Seattle-based Amazon AMZN,
doubled the size of its operations during the pandemic, adding more warehouses and workers to meet demand from homebound consumers who felt more comfortable buying things online. But as the worst of the pandemic subsided, she found herself with too much warehouse space and too many workers.
“Subletting is something many established companies do to help manage their real estate portfolio,” Carroll said.
Last month, the company reported its first quarterly loss since 2015, fueled by slowing e-commerce and a massive writedown of its investment in electric vehicle startup Rivian Automotive. In a statement last month with its results, CEO Andy Jassy said the company is now focused on improving productivity.