More than 1,200 Amazon delivery drivers have been laid off and some facilities have been forced to close, after the company cut ties with several of its smaller delivery service partners.
At least seven delivery firms have reported hundreds of job cuts over the last month after Amazon ended their contracts with its Delivery Service Partner program (DSP), CNBC reported on Thursday.
According to Worker Adjustment and Retraining Notifications (WARN) filed across New York, Pennsylvania and Connecticut, the companies announced 1,205 drivers will be let go, while some centers will be shutting down completely.
Delivery service company Prime EFS announced 388 of its employees will be laid off in New Jersey and Pennsylvania, and Courier Distribution Systems said 273 drivers in its Pennsylvania and Wisconsin locations will be let go.
Systemize Logistics, based in Massachusetts, also announced it was closing its facilities in New York and Connecticut, which will result in 121 job losses.
Sheffield Express said it was closing its facility in Connecticut and would lay off 95 employees.
While details on why the company severed ties with the contractors were not released, Amazon told CNBC it regularly evaluates its carrier partnerships.
‘We have ended relationships with some partners and Amazon is working closely with all impacted drivers to ensure they find opportunities to deliver Amazon packages with other local Delivery Service Partners with little to no disruption to pay,’ a spokesperson said in a statement.
Amazon launched the delivery service program in 2018 which allows smaller companies or budding entrepreneurs to team up with the e-commerce giant to deliver orders to customers’ doorsteps.
In a blog post published earlier this month, Amazon celebrated the success of the program, revealing it now has 1,300 DSPs operating in five countries and has created more than 85,000 jobs.
The company is among the very few businesses that have benefited from the coronavirus pandemic, which forced many consumers unable to visit physical stores to shop online more.
In March, it was even forced to hire thousands of temporary employees to meet a surge in consumer demand.
CEO Jeff Bezos last month told lawmakers the company had hired 175,000 employees during the pandemic, including many who were laid off from other jobs.
It later announced it would offer permanent jobs to about 70 per cent of the short-term U.S. workforce it hired.
Despite its success, the company had come under fire during the health crisis after it was accused of putting employees’ health at risk by keeping nearly all its warehouses operational.
In May, an Amazon employee told Reuters at least 800 US-based workers had tested positive for Covid-19.
The following month the company was sued for allegedly fostering the spread of the coronavirus by mandating unsafe working conditions, after one employee died.