Amazon to Close More Facilities In California, Affecting Over 300 Jobs

Online retail company Amazon announced on Wednesday that two more fulfillment centers, one based in Sacramento and the other in Irvine, are to close by early November, becoming the latest Amazon closure in the state.

Over the last two years, Amazon has closed or scaled back many locations across California, resulting in thousands of jobs being lost. This has included 9 warehouses being closed or diminished in August 2022, thousands of Silicon Valley jobs being slashed in early 2023, Amazon pulling out all of their stores in San Francisco in March 2023, a Stockton warehouse closing down in early June, and most recently, a San Francisco fulfillment center closing down a few months ago.

While Amazon has opened up new facilities and other locations during this time, the huge cycle of closures has resulted in many workers either being fired, transferred to locations farther away, and in some cases, leaving cities high and dry with a huge employment gap to fill. Reasons for the closures have also varied, including consolidation, closing older facilities in favor of building or buying new ones in a different geographic area, reacting to the economic fluctuations following the COVID-19 pandemic, and in the case of stores, cities refusing to allow stores to be cashless and high rent prices. The state has also made it difficult for the company, with Amazon looking to push back against labor unions and being hit several times with worker law violations.

This led to this week where Amazon announced the closure of even more facilities. According to a WARN notice filed this week, both the Sacramento and Irvine fulfillment facilities are to close, affecting 159 and 162 workers respectively at each. While Amazon did say that they hope to keep as many as possible through transfers, layoffs are also likely. While a new logistic center and warehouse are currently under development in both San Francisco and San Mateo, neither are on-line yet. In San Francisco’s case, construction hasn’t even started yet.

Over 300 jobs affected

“We’re always evaluating our network to make sure it fits our business needs and to improve the experience for our employees, customers, and partners. As part of that effort, we’ve decided not to renew the lease at our facilities in Irvine and Sacramento,” said Amazon spokesman Sam Stephenson on Wednesday. “We appreciate our team’s hard work and commitment, and we’re supporting impacted employees to find new opportunities within Amazon, including at nearby fulfillment sites.”

While warehouse and other similar jobs are facing cuts and consolidations, other positions, like Amazon drivers, are currently wanted across the state. This points to Amazon cutting and consolidating facility and white collar jobs, while also still expanding their delivery and e-commerce network within California.

“It is Amazon finding the cheapest and most cost-effective ways,” explained Mark Ramsey, a delivery and logistics consultant based in Los Angeles, to the Globe on Thursday. “A lot of these facilities they are closing, it’s because they have bigger ones, more advanced ones out there. A lot of the ones they are closing are smaller, or make it difficult to get a lot of trucks in and out. Some places, renting them out has gotten too expensive.

“And it isn’t just Amazon. Delivery companies everywhere are continuing to do this. And the excuses can get even more extreme. Some places had to be moved away because of local resident opposition, for example. No one likes all those trucks rolling by. In California, a lot of warehouses have been ringed more around major cities. Like, there are a ton of warehouses and fulfillment centers in the Inland Empire. Ontario Airport is a big cargo hub, at least for now. A bunch of those cargo airlines are looking elsewhere right now because Ontario has a growing number of issues. Same with some NorCal ones.

“But yeah, these cuts, they are hitting hard. But what you need to look for are the places where they aren’t offering relocation to find out the real problem areas. Sacramento and Orange County aren’t problem areas. But in the Bay Area, where they haven’t offered nearly as much in that? Makes sense with all the expensive rent and higher than usual wages now. That’s also where a lot of the violations happened.”

More delivery company cuts and consolidations are expected later in the year.