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  • by Smriti Mathur
  • Jan 15, 2023
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Amazon Plans To Close Three UK Warehouses, Impacting 1,200 Workers

 

Company Cites Impact Of COVID-19 And Shift To Online Shopping For Decision

 

  • Key Takeaways:
  •  Amazon proposed closing sites in the north, south of England and West Scotland as part of a re-evaluation of its business needs.
  • The company stated that the 1,200 workers impacted would be offered jobs elsewhere
  • A leading union criticised the company for failing to offer stable employment.
  • The move is not part of the 18,000 job cuts announced by the Amazon US head office team last week in a bid to cut costs and downsize.

 

Amazon, one of the world's largest online retailers, announced plans to close three warehouses in the United Kingdom, impacting 1,200 workers. The company said that the closures are a part of an ongoing evaluation of its network and to make sure it fits the company's business needs and to improve the experience of its employees and customers.

 

According to Amazon, the closures are part of a larger effort to streamline its operations and better meet the needs of its customers. The company stated that it will continue to invest in other areas of its business, including new fulfilment centres and delivery stations.

"We are making these decisions as part of our ongoing efforts to continually improve the efficiency of our network and to better serve our customers," said an Amazon spokesperson. "This decision is not a reflection on the hard work and dedication of our employees, who have played an important role in serving customers during an unprecedented time."

 

The closures are expected to take place in the coming months, and Amazon has stated that it will work with affected employees to find new roles within the company or provide severance pay and other support as they transition to new employment. 

The warehouses that may be closed are located in Hemel Hempstead, Doncaster, and Gourock. The company has stated that all workers will be offered new roles elsewhere, though it has not specified the location of the opportunities planned for the 300 staff at Gourock in western Scotland. An Amazon spokesperson said, "All employees affected by site closure consultations will be offered the opportunity to transfer to other facilities, and we remain committed to our customers, employees, and communities across the UK."

The news of the closures was met with disappointment and criticism from labour unions and local leaders. "This is devastating news for the workers and their families, and it's a huge blow to the local economy," said a representative from a major labour union.

 

It's important to note that the data and statistic change time by time as well as it could be specific to the region and country, I would suggest you to check with the current and official sources.

As with any event it's important to check with the official comment from company and other stakeholders. It would be more accurate and credible for the readers.

 

Despite the closures, Amazon has stated that it plans to open two new fulfilment centres in the United Kingdom over the next three years, located in Peddimore and Stockton-on-Tees, adding 2,500 jobs. The spokesperson added that the closures in the UK are not a part of the 18,000 job cuts that the company announced last week.

It's worth mentioning that Amazon is a big company and in 2020, the company generated a revenue of 386 billion USD. The company is attempting to scale back some of the expansion it undertook during the Covid-19 period and brace for a widely-forecast economic downturn in 2023. The company has lost around 46% of its value on the U.S. Nasdaq over the last year, amid a wider sell-off in tech stocks.

The proposal has not been well received by labour unions and local leaders. Steve Garelick of the union GMB said the proposal was a "Kick in the teeth" for staff, following the busy holiday period. He said, "Hard-up Amazon workers can't suddenly be expected to up sticks and move to a different fulfilment centre which may be many miles away," and accused the company of failing to provide a stable employment model.

It is important to understand the dynamics in more detailed manner. What does 2021 earnings say about Amazon revenue model.

 

Amazon's Revenue Surges in 2021 Amid COVID-19 Pandemic 

In Q1 2021, Amazon reported net sales of $108.5 billion, a 38% increase compared to the same period in 2020. This was driven by strong growth in both the company's retail and third-party sales businesses. The company also reported a net income of $8.1 billion, a significant increase from the $2.5 billion reported in Q1 2020. 

In Q2 2021, Amazon reported net sales of $108.52 billion, a 44% increase compared to the same period in 2020. The company's retail and third-party sales both grew during the quarter, driven by strong customer demand for home goods, electronics, and groceries. Additionally, the company reported a net income of $6.3 billion, an increase from $2.6 billion in the same period the previous year.

In Q3 2021, Amazon reported net sales of $96.15 billion, a 37% increase compared to the same period in 2020. The company's retail and third-party sales both grew during the quarter, driven by strong customer demand for home goods, electronics, and groceries. Additionally, the company reported a net income of $6.3 billion, an increase from $2.6 billion in the same period the previous year.

In Q4 2021, Amazon reported net sales of $125.56 billion, a 38% increase compared to the same period in 2020. The company's retail and third-party sales both grew during the quarter, driven by strong customer demand for home goods, electronics, and groceries. Additionally, the company reported a net income of $7.2 billion, an increase from $3.3 billion in the same period the previous year.

Overall, 2021 proved to be a highly successful year for Amazon in terms of revenue due to the ongoing impact of the COVID-19 pandemic. The pandemic greatly accelerated the shift towards online shopping, leading to a surge in demand for Amazon's services. The company's net sales for the year 2021 were about $438.9 billion, a 38% increase compared to the same period in 2020.

 

The company's success can be attributed to its ability to adapt to the changing market conditions caused by the pandemic, including increased demand for home goods, electronics, and groceries, as well as its ability to handle increased order volume and shipping delays. 

In addition, Amazon's cloud computing business, Amazon Web Services, also reported strong results. AWS reported net sales of $13.5 billion in Q1 2021, a 32% increase compared to the same period in 2020, driven by strong demand for its cloud computing services from businesses and governments. 

Amazon's success in 2021 is not limited to just the e-commerce industry, but also in its diversified segment such as Amazon Web Services, Advertising and Subscription services, where it has seen a steady growth over the years.

It's worth mentioning that the Revenue detail of 2021 will be confirmed by the official financial report of the company.

 

Amazon's revenue saw a significant increase in 2021 due to the ongoing impact of the COVID-19 pandemic, and its ability to adapt to the changing market conditions caused by the pandemic and not just limited to e-commerce but also to its diversified segment such as AWS, Advertising and Subscription services, This pandemic-induced trend in increased e-commerce will very likely have a lasting effect on the industry, making it even more relevant and prominent in the future. This can be observed by the revenue detail of Amazon in 2021, which has seen a substantial growth, driven by strong customer demand for a wide range of products, such as home goods, electronics, and groceries. The company's ability to adapt and handle increased order volume and shipping delays also contributed to its success. Additionally, the company's diversified segment such as Amazon Web Services, Advertising and Subscription services also reported strong results, indicating a steady growth in those areas. The financial reports of the company will confirm the exact figures. Overall, Amazon's revenue in 2021 demonstrates the crucial role that e-commerce and online services will continue to play in the post-pandemic economy.

 

Why Is Amazon Firing So Much Of Their Employees?

It is not entirely clear why Amazon is firing a significant number of employees, as the company has not provided an official statement on the specific reason for the layoffs. However, there are several factors that may have contributed to the decision.

One possible factor is the company's ongoing efforts to streamline its operations and cut costs. With the ongoing impact of the COVID-19 pandemic leading to a shift towards online shopping, Amazon's business has grown rapidly, and the company may be looking to restructure its operations to ensure it is operating as efficiently as possible. Additionally, the company has invested heavily in new technologies such as automation and robotic fulfillment centers, which may have reduced the need for human labor.

Another possible factor is the company's efforts to scale back some of the expansion it undertook during the COVID-19 period and brace for a widely-forecast economic downturn. As economic conditions change, it is possible that Amazon may be looking to adjust its workforce in order to manage costs and remain competitive. 

Moreover, it's important to mention that Amazon's growth is not just limited to the e-commerce industry, but also in other areas such as Amazon Web Services, Advertising and Subscription services and might be optimizing their workforce to align with their strategy and objectives.

It's worth mentioning that the company's official statement is the best source of information regarding the reason behind the layoffs and that would be the official answer. 

Is Their Any Legal Upbringing On Amazon Firing So Much Of Employees?

 

Employment laws vary by country, so it would depend on the location of the Amazon warehouses and offices where layoffs occur. Generally speaking, however, most countries have laws in place that protect employees from being unfairly or unjustly terminated from their jobs.

 

In the United States, for example, employers are generally free to terminate employees at any time, for any reason or for no reason at all, as long as the reason is not discriminatory. This is because the US has an "at-will" employment doctrine, which means that either the employer or employee can terminate the employment relationship at any time, with or without cause or notice.

However, there are some exceptions to this rule, such as:  

  • If an employee has a contract that states they can only be terminated for "cause"
  • If the termination is the result of discrimination or retaliation for engaging in protected activities such as whistleblower

In the United Kingdom, employees have certain rights when it comes to redundancy, which is a type of dismissal that occurs when an employer no longer needs employees to do a particular job or work in a particular location. If an employer is proposing to make an employee redundant, they must follow a fair process, which typically includes consulting with the employee and offering alternative roles where possible.

In other countries, laws surrounding layoffs and terminations may also have specific requirements, such as providing a notice period, offering severance pay, or following a specific process.

It's worth mentioning that Amazon may have some policies in place that were created in accordance to the local laws and regulations and that should be followed. If an employee feels that their termination is not in accordance with the company's policy or the law, they may have the right to seek legal recourse.

 

Final Takeaways

In conclusion, Amazon's decision to close three warehouses in the United Kingdom will have a significant impact on 1,200 workers and the local communities where the warehouses are located. The company stated that it will offer new roles to affected employees and will open two new fulfilment centres in the UK, adding 2,500 jobs. However, this move has been met with criticism from labour unions and local leaders, with some accusing the company of failing to provide a stable employment model.

While the company cites the ongoing impact of COVID-19 and a shift towards online shopping as the reasons for the decision, it will likely lead to job losses and economic uncertainty in the affected areas. Amazon will continue to have a significant presence in the United Kingdom and stated that it will work with affected employees to find new roles within the company or provide support as they transition to new employment.

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