Amazon to slash office space — billion-dollar cutbacks spark speculation

In a strategic shake-up, Amazon, the tech titan synonymous with sprawling and amenity-rich offices, has announced plans to drastically reduce its office footprint.

Landlords are on high alert as the e-commerce giant aims to slash vacancies — and save a whopping $1.3 billion in the process.

Amazon is set to execute this move by letting go of leases, terminating agreements prematurely and curtailing the use of certain floors, according to a report by Business Insider.

Jeff Bezos tours the facility at the grand opening of the Amazon Spheres, in Seattle, Washington on January 29, 2018. AFP via Getty Images

With a current office vacancy rate standing at a hefty 33.8%, Amazon is gearing up to trim down to 25% this year, with aspirations to hit a mere 10% within the next three to five years.

The vacancy surge is attributed to Amazon’s recent slowdown in growth and a wave of layoffs, with 160 jobs axed from the advertising sector alone this week.

However, an Amazon spokesperson swiftly quelled speculation, asserting that the move is purely financial, brushing off notions of a larger organizational shift.

“To suggest that this is about anything else — such as our expectations for working in the office — is at best a misunderstanding and at worst intentionally misleading,” the spokesperson clarified to the outlet.

In tandem with downsizing, Amazon is spearheading efforts to consolidate its workforce into central hubs, compelling employees to clock in at least three days a week.

The vacancy surge is attributed to Amazon’s recent slowdown in growth and a wave of layoffs. MediaNews Group via Getty Images

This push towards centralization has seen remote workers pressured to relocate closer to primary offices, prompting pushback from more than 30,000 employees who petitioned against the return-to-office policy.

Yet, their plea fell on deaf ears as leadership rebuffed the dissent.

This move comes amid Amazon’s expansive real estate pursuits, including a reported hunt for 50,000 square feet of office space in Miami-Dade County, following founder Jeff Bezos’ high-profile move to the area from Washington State.

30,000 employees petitioned against the return-to-office policy to original headquarters, but were unsuccessful. Patrick Fallon/ZUMAPRESS.com

Additionally, Amazon secured Austin’s second-largest office lease last year, locking in 102,000 square feet at Domain 8, a premier office tower owned by Cousins Properties.

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