Delivery Service Providers (DSP) working for Amazon.com, Inc. (NASDAQ:AMZN) have laid-off more than 1,800 workers. DSP – Letter Ride would lay-off 900 in Texas and California. According to the documents available with Texas Workforce Commission, Letter Ride would eliminate jobs at its facilities in Houston, Fort Worth, Dallas, and Austin. In Dallas, it would begin the lay-offs on December 4, 2019. It would complete the dismissals in Texas by December 7, 2019.
Previously several outlets removed workers in Massachusetts, Connecticut, Ohio, North Carolina, and Georgia after they lost contracts from Amazon. Delivery service providers deliver packages to the doorstep of Amazon customers. Inpax and Urban Mobility Now decided to remove more than 900 workers. The lay-offs would affect managers, dispatchers, and drivers. Inpax would eliminate 228 people in Dallas based Amazon facilities on October 2, 2019. It would remove another 400 across the nation.
Amazon supports drivers
Third-party delivery companies – DSPs that work for Amazon exclusively are responsible for insurance, driver’s wages, vehicle maintenance, and health benefits. A company spokesperson said it works with a lot of carrier partners to deliver packages to the customers’ doorstep. It has ended the relationship with those firms and using the services of drivers in alliance with local service providers to deliver the packages to Amazon customers.
Amazon expands logistics network
Many lay-offs at DSPs are part of Amazon’s focus on its own logistics network. The e-commerce giant is expanding the logistics network. The company recruited several people in 2018 to start delivering Amazon packages by creating new DSP firms. Each firm would comprise up to 40 vehicles in its fleet. The in-house logistics operations of Amazon are growing and include ocean freighters, vans, trucks, and planes.
DSPs that depend on Amazon are forced to lay-off workers after losing the contracts. The expected revenues of XPO logistics dropped by $600 million because Amazon in February decided to deliver the packages using its own logistics network. XPO engaged in collecting packages from Amazon and provides to Amazon customers with the help of US Postal service.
FedEx announced in May that it would not fly the packages of Amazon anymore. The courier service took this decision because it is not deriving handsome profits from the delivery of Amazon packages.
