Montreal CityNews reports that Amazon (AMZN) will close all seven of its warehouses in Quebec, a move that will lead to the layoff of 1,700 regular employees and impact 250 temporary seasonal workers whose contracts were set to expire. This strategic pivot sees Amazon returning to a third-party delivery model, akin to the system it employed prior to 2020, which the company believes will enhance service quality and reduce costs for customers in the long term. The warehouses, located in areas like Laval, Lachine, Longueuil, and Côteaux-du-Lac, will shut down over the next two months in a phased manner.
Barbara Agrait, a spokesperson for Amazon, emphasized that this shift back to third-party logistics through local small businesses would not alter the customer experience. Despite the closures, Amazon assures that “nothing else changes” for its Quebec clientele. This decision, however, was not taken lightly, as Agrait notes, and includes support for the affected employees in the form of severance packages offering up to 14 weeks’ pay, along with job placement resources to ease the transition.
The layoffs primarily impact managers, and employees at delivery and sorting centers, according to La Presse. Additionally, the ripple effects extend to thousands of independent contractors responsible for the last-mile delivery to customer homes. This comes at a time when the workforce at Amazon’s Laval warehouse had just achieved union certification, sparking speculation about the motives behind the closures. Amazon, however, insists that the decision to close these facilities is solely focused on improving service delivery and not a response to union activities.
This move by Amazon reflects a broader trend in the retail and logistics sectors where companies reassess their operational models in response to economic pressures, technological advancements, or shifts in consumer behavior. The return to a third-party delivery model is part of Amazon’s strategy to leverage the efficiencies of local businesses, potentially fostering local economic activity while also aligning with cost-saving measures. However, it also raises questions about the sustainability of jobs in the gig economy and the implications for workers’ rights, especially in regions where union efforts are gaining traction.
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