Why is Amazon planning to cut delivery jobs?
Reportedly, Amazon currently relies on third-party companies to employ many of its delivery drivers. Under the proposed Delivery Protection Act backed by New York City Mayor Zohran Mamdani, the e-commerce giant may sack 5,000 employees and could directly employ more than 5000 delivery workers. Furthermore, the warehouse closure may lead to an additional 2,000 workers' jobs at risk.
However, there are two sides to the proposed bill. The supporters suggest that the bill would improve delivery workers' wages and working conditions by requiring Amazon to employ them directly rather than through third-party contractors. Whereas critics argue that Amazon might cut jobs or close facilities instead of complying with the new rules.
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Critics draw fear from Amazon’s warehouse closure last year in Quebec, Canada, following a unionisation drive at its Laval facility. Due to the closure, around 1,900 warehouse workers lost their jobs along with 2,800 contracted delivery workers. However, Amazon denies the unionisation link.
However, it should be noted that the bill has not reached a vote, and no voting date has been scheduled, so the proposal has not yet become law. The report further stated that Amazon’s warehouse closure in New York could increase delivery times and prices, and it may also lead to higher costs for customers according to a company-funded study. The major impact is said to be on same-day and same-morning deliveries.
Amazon is also reducing its workforce across different countries. The company recently cut just under 1,000 jobs, mainly in retail teams in India, the US, and the UK. These job reductions are part of a broader layoff plan reported to affect around 30,000 roles.