Amazon Plans To Cut $1.3B In Costs By Shedding Office Space

Amazon

Amazon is planning to slash its office space footprint over the next three to five years in a way that will save the company $1.3B annually, according to Business Insider, citing an anonymous source and an internal document obtained by the publication.

Amazon's vacancy rate for its office space is about 33.8%, according to BI. The plan is to decrease that to 10% by the end of five years by letting leases expire and negotiating early lease terminations.

The report doesn't say how much space would be returned to office markets in which Amazon has a presence, but considering how much space the retail giant currently takes, the total would be substantial.

In North America, according to the company's most recent 10-K filing with the Securities and Exchange Commission, Amazon leases about 29.6M SF of office space. Outside North America, the company leases about 24.5M SF, for a worldwide total of roughly 54.1M SF.

At a vacancy rate of 33.8%, that would mean that about 18.2M SF is vacant around the globe.

The move is part of a larger scaling back of Amazon operations, including large layoffs and canceled projects.

An Amazon spokesman told Bisnow by email Thursday that Amazon's adjustment isn't about a return-to-office policy.

“The changes we've already made are improving vacancy rates, and we expect to see further progress as we continue to learn and iterate on our portfolio,” he said. “We’ll continue to communicate directly with employees and our partners about any changes to their space, as we always do."

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