Amazon may cut 5,000 US contract jobs, close 15 warehouses
What's the story
Amazon is planning to lay off up to 5,000 workers in the US, The New York Post reported. However, it's important to note that these layoffs would mainly affect contract workers rather than direct Amazon employees. The move comes as part of a wider strategy that could also see the closure of 15 warehouses in New York City.
Legislative impact
Proposed Delivery Protection Act
The potential job cuts are linked to the proposed Delivery Protection Act, which is backed by Mayor Zohran Mamdani.
If passed, this bill would require Amazon to directly employ over 5,000 delivery workers who are currently contracted through 40 third-party companies.
The legislation could also result in the closure of 15 warehouses and affect another 2,000 workers.
Business adjustments
Concerns over job cuts
Amazon currently employs third-party contractors for delivery roles. If the proposed bill becomes law, the company would have to change its delivery model and directly employ these workers.
While supporters of the NYC bill argue it would improve wages and working conditions, some fear Amazon might go ahead with job cuts.
This concern is fueled by Amazon's withdrawal from Quebec after a unionization drive at its Laval facility and seven warehouse closures last year.
Industry worries
Contractors fear the bill could put them out of business
There are suggestions of possible compromises, such as allowing contractors to continue deliveries while Amazon provides stronger safety guarantees.
However, some contractors fear the bill could put them out of business.
Joe Artus, owner of WGA Transit, said the bill could threaten his company and its 189 employees.
"If this thing passes," he warned, "there is no way for my company to exist or to keep my 189 employees."
Company stance
Increased delivery costs and times
Amazon has said that closing the warehouses would increase delivery times and prices.
A company-funded study estimated the legislation could cost New Yorkers an extra $664 a year, or about $5.20 per package, including deliveries by other companies.
Same-day and same-morning deliveries would be most affected by these changes.
The possible job cuts in New York come as part of Amazon's global workforce reduction strategy.