Amazon is also cutting jobs in Germany – a logistics center is closing

The reduction of 28,000 jobs at Amazon worldwide also affects Germany. That's what Germany boss Rocco Bräuniger said on Thursday evening in the Hamburg business journalists' club. "We look at every single category and every area for more efficiency," said the manager. Most recently, Amazon boss Andy Jassy tightened the global austerity program a few days ago.

Amazon is continuously checking which areas have savings potential, which services could be streamlined or which unsuccessful experiments would be discontinued, said Bräuniger. For example, Amazon recently stopped developing delivery robots.

"It's always been like that, and it probably always will be like that. The difference now is that we have always been able to offer the employees concerned other positions. But because we've grown so much recently, that's no longer possible," said Bräuniger. For example, Amazon doubled its own delivery logistics in Germany between 2020 and 2022. The number of employees in the Federal Republic increased from 30,000 to 36,000 in 2022.

In 2022, sales in German eCommerce fell significantly for the first time across the industry. For example, sales stagnated at Zalando, Otto.de reported a noticeable drop in sales and a loss of business this week.

Bräuniger said that Amazon had also calculated higher sales growth. “It was clear that the growth rates from the pandemic would continue. However, the fact that it happened so quickly and coincided with the effects of the Ukraine war was tough. It's not that easy to manage," said Bräuniger. Logistics halls that have already been rented are initially empty and are sometimes sublet until they are needed.

However, the manager does not want to discontinue entire ranges. Bräuniger said that business with proprietary devices such as the smart Alexa speaker continued despite cost-cutting measures in the division in Germany. Amazon only started selling its own TV sets in Germany this week.

Instead, the main thing is to use internal savings potential. For example, Amazon is merging the purchasing of the sportswear and fashion product areas. "There's an overlap between the brands anyway," he said.

Bräuniger said he was not allowed to say how many jobs Amazon was cutting in Germany. However, there is no hiring freeze in other areas. "We will continue to invest, for example in logistics and infrastructure," said Bräuniger. In the current year, two more logistics centers will open in Germany - after three new locations in the previous year.

In the period from 2010 to 2021 alone, Amazon invested 48.5 billion euros in Germany. With the Brieselang site near Berlin, Amazon is closing a logistics center in Germany for the first time. This is not part of the savings program, but is due to structural problems to automate the warehouse more, said Bräuniger. The positions that will be eliminated are not included in the 28,000 cuts announced globally.

Despite the austerity program, it remains the case that Amazon will move into new offices in the Berlin Edge Tower, which is currently under construction, and in a new office building in Munich. Most recently, the group had stopped the further construction of its second company headquarters in the US state of Virginia.

However, the offices should play a stronger role again. The announcement is already in place worldwide that employees should return to the office at least three days a week. "How we implement that in Germany is my thing," said Bräuniger. More places for video conferences are needed.

Bräuniger recognized positive signals for further market development. For example, climate-friendly products and food are in greater demand. He continues to see restraint with lower-priced products, for example in the areas of furniture and entertainment electronics. Their target group must obviously save and refrain from buying. More expensive branded products were more stable. He saw business with corporate customers as a growth area for Amazon – such as supplying offices with stationery or restaurateurs with spirits.

In the ongoing discussion about the minimum tax for global companies planned by Finance Minister Christian Lindner (FDP), Bräuniger defended himself against the impression that Amazon does not pay any taxes in Germany. In 2021, the group paid 3.45 billion euros in taxes in Germany, of which 476 million euros were direct corporate taxes on sales of 32 billion euros at the time. "Because we invest so much, there isn't that much profit left over," he explained the small sum. Therefore, no digital tax makes sense for the Amazon trading business.

Most analysts currently recommend buying Amazon shares. Since the beginning of the year, the paper has increased by almost 14 percent - due to the strong market environment, but probably also because of the savings announcements.

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