Amazon.com Inc. reportedly has cut ties with several small delivery firms across the U.S., spurring facility closures and layoffs.
More than 1,200 drivers will lose their jobs as a result of the decision, CNBC reported.
The seemingly puzzling move comes as Amazon (AMZN) recently touted the growth of its delivery service partner program, saying it now counts 1,300 DSPs across five countries, CNBC explained.
An Amazon spokesperson told CNBC in a statement that the company regularly evaluates its carrier partnerships. In another recent round of layoffs, beginning in February, the company ended contracts with Transportation Brokerage Specialists, Bear Down Logistics, Express Parcel Service and Delivery Force, among several other firms, resulting in at least 2,000 layoffs.
“We have ended relationships with some partners and Amazon is working closely with all impacted drivers to ensure they find opportunities to deliver Amazon packages with other local Delivery Service Partners with little to no disruption to pay,” the spokesperson added.
Meanwhile, when virus-spooked Americans began avoiding stores earlier this year and shifting spending online, far more Walmart customers went to Amazon.com than Walmart.com, Bloomberg explained.
So even though Walmart, too, has thrived as an essential service amid the pandemic, Amazon is benefiting more.
In the first week of February, for every dollar shoppers spent with the two rivals, 66 cents went to Walmart and 34 cents to Amazon, according to Facteus, which tracks credit and debit-card spending for millions of shoppers. In the first week of August, that gap narrowed to 55 cents to Walmart and 45 cents to Amazon. Walmart, through a spokesman, declined to comment.
When the coronavirus began spreading across the the U.S., Amazon stumbled at first. Shipping times lengthened; multiple products were out of stock. Some reports said the company’s vaunted customer service metrics were starting to slip. Amazon responded by hiring 175,000 people to keep its operations running as existing employees sickened or stayed away for fear of catching COVID-19.
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