Amazon told investors it has 'too much space' after a massive warehouse buildout during the pandemic. Here's why industry insiders aren't worried.
But now, Amazon has"too much space," CFO Brian Olsavsky told reporters Thursday.too many warehouses and not enough orders,
"We have too much space right now versus our demand patterns," Amazon CFO Brian Olsavsky told reporters Thursday, explaining that the company plans to temper new warehouse leasing activity. The buildout led to an expensive network of warehouses that took a toll on the company's profitability. Margins for Amazon's North American commerce division dipped negative at the end of last year, as rising costs outstripped sales, the company's quarterly earnings report shows. Amazon said that excess capacity, productivity loss and inflation cost the company $6 billion last quarter.
"We literally committed to as much as we could to handle the volume that we saw," Olsavsky said Thursday."We did not want space to be constrained. Even with that intent, it took until the second quarter of last year for us to feel like we had enough space."
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