To reduce excess capacity, Amazon plans to sublease warehouse space

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On May 24, according to the Wall Street Journal, online retail giant Amazon (Amazon) is trying to reduce some warehouse space after a slowdown in e-commerce business.

Amazon is looking to sublease at least 10 million square feet of warehouse space and is also exploring terminating or negotiating leases it has signed with outside warehouse owners, one of the sources said.

It is understood that this is the measure taken by Amazon after its first quarterly loss in seven years. According to the financial report, Amazon’s net loss in the first quarter was 3.844 billion US dollars (about 25.255 billion yuan), and the net profit in the same period last year was 8.107 billion US dollars. Amazon said falling demand had strained warehouse operations after about two years of sharp growth.

Amazon is still figuring out exactly how much space to sublease, which is expected to be at least 10 million square feet, but could eventually double or triple that number, the sources said. Amazon also has more space than it needs in markets like New York, New Jersey, California and Atlanta.

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