Amazon is one of the few brands that has registered figures to the high in the middle of the pandemic. However, it has now decided to cut its contracts with small delivery companies, which will mean the bankruptcy of many of them as well as the dismissal of thousands of workers.
This has been released by a recent report delivered by Reuters, which indicates that Amazon announced this Thursday of the aforementioned cut that affects small delivery companies in the United States and that, in recent months, has resulted in the progressive dismissal of thousand 2025 delivery workers.
Subcontracts are canceled
In a timely manner, the e-commerce giant’s decision affects both delivery drivers and drivers who work for one of the seven small companies with which Amazon had a subcontract thanks to the “Delivery Service Parntner” (DSP) program.
So far, Amazon has about one thousand 300 DSP programs in five countries that represent more than 85 thousand jobs, with a volume of deliveries exceeding the 1.8 billion packages.
This program, which was launched during 2018, has allowed the company led by Jeff Bezos to expand its delivery capacity to compete with delivery giants such as UPS and Fedex, with promises of delivery in less than 24 hours.
Thus, the dismissed workers were in charge of collecting the shipments at Amazon stations to take them to the consumer’s hands.
As expected, the most affected have been small companies, which before the end of the subcontracts have been forced to close or announce layoffs, because the deal with Amazon, for many, represented almost their total operations.
For example, Courier Distribution Systems, a former Amazon partner located in Georgia, reported that it would lay off 273 drivers Due to the cancellation of the contract, it has fired 273 drivers in Pennsylvania and Wisconsin.
Similarly, Systemize Logistics, based in Massachusetts, closed its stores located in Connecticut and New York, which lost about 121 jobs.
Other small businesses affected have been TL Transportation, which eliminated 80 jobs in Pennsylvania and 76 more in New York; New Jersey-based Prime EFS, which decided to lay off 338 employees in the state and in Pennsylvania; JST Transportation, which cut 51 jobs in Massachusetts; and Deliverol Global, which had to do without 41 jobs. Lastly, Sheffield Express said goodbye to 95 employees in Connecticut.
The Amazon rationale
Faced with this situation, an Amazon spokesperson said in a statement to CNBC that the elimination of these contracts is part of a regular evaluation that is made to the associations with the operators.
“We have terminated relationships with some partners and Amazon is working closely with all affected drivers to ensure they find opportunities to deliver Amazon packages to other local delivery service partners with little or no interruption to payment,” stated the spokesman.
However, for many of these former Amazon partners, the decision came as a surprise and like a bucket of cold water.
In a press release, IntelliQuick Delivery said that “this is a total shock to our company as a whole and I can assure you that the decision was not based on job performance.”
The truth is that these layoffs and cancellation of contracts come at a time when Amazon seems to be living glory in terms of business.
In accordance with Amazon, in its second fiscal quarter recorded total sales by $ 88.9 billion, which represented a growth of 40 percent compared to the same period, but last year.
Furthermore, it indicated that its net income amounted to 5,200 million, that is, earnings per share were 10.30 dollars, an increase in 100 percent.
The point of this is that Amazon’s numbers far exceeded analyst estimates who anticipated 81.530 million and report earnings per share of $ 1.46, according to a report of Venturebeat.