Amazon cancels or delays plans for at least 16 warehouses this year

After spending billions doubling the size of its fulfillment network during the pandemic, Amazon finds itself in a perilous position.

In the first quarter of 2022, the e-commerce giant reported a $3.8 billion net loss after raking in an $8.1 billion profit in Q1 2021. That includes $6 billion in added costs — the bulk of which can be traced back to that same fulfillment network.

Amazon (NASDAQ: AMZN) CFO Brian Olsavsky said the company chose to expand its warehouse network based on “the high end of a very volatile demand outlook.” So far this year, though, it has shut down or delayed plans for at least 16 scheduled facilities…

The slowdown can be attributed to a few different factors. Many point to inflation as the main culprit — with less disposable income, shoppers are trying to save by spending less online, putting their money into things like travel and fuel. Subsiding pandemic fears are also driving a departure from e-commerce and a return to in-person shopping.