TechCenter

Amazon: We’ll Spend More on Data Centers, Less on Warehouses

E-commerce titan shifts capital projects spending from overbuilt logistics network to tech infrastructure.

By Jack Rogers | August 01, 2022 at 08:21 AM

When Amazon unveiled a Q1 2022 loss of nearly $4B in April—its first quarterly loss since 2015—the company said it had overestimated the pace of e-commerce growth and overextended its logistics network, which doubled in size during the pandemic with dozens of new fulfillment center projects and 370M SF of leased industrial space.

In Q2, Amazon has been busy slashing unneeded warehouse space by postponing ribbon-cuttings at newly built warehouses for up to two years, subleasing up to 30M SF and terminating some leases. The company also has abruptly canceled numerous projects—approved by local officials, but yet to break ground—for new fulfillment centers on parcels of the 4,000 acres of land Amazon bought during the pandemic.

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