Amazon also claimed to have excess staff; this, together with oversized warehouses, resulted in additional costs for the first half of 2022 of $ 10 billion.
In the early period of the pandemic, demand had been so high that Amazon nearly doubled its workforce in the past two years to over 1.6 million people worldwide. It has also increased its warehouse capacity to cope with the avalanche of orders. At the end of 2021, Amazon leased or owned nearly 36 million square feet of warehouses and data centers, more than double what it had in 2019.
But then, with the relative regression of the pandemic, Americans felt more comfortable leaving their homes and demand slowed across the board as well. Online sales growth of the retail sector in the United States, which rose to 36.4% in 2020, returned to more normal growth in 2021 and 2022, registering 17.8% and 9%, respectively. 4%, according to Insider Intelligence.
Ecommerce in trouble
The June retail sales data, which will be released on Friday, will shed more light on the e-commerce trend. The most recent data available, which refers to the month of May, showed that online sales fell by 1%, while overall retail sales fell by a more modest 0.3% since April, due to the skyrocketing inflation.
“This is a time when consumers are much more thrifty,” said David Niekerk, former vice president of human resources at Amazon, “and this is undoubtedly having an impact on Amazon.” Brian Olsavsky, the company’s chief financial officer, said many of the warehouse expansion decisions were already made two years ago, in the midst of the pandemic boom, and therefore now the company has an objective difficulty in adapting to more limited needs. .