Amazon has announced intentions to shut down over a dozen warehouses and lay off thousands of employees in New York City, contingent on the passage of a labor bill championed by Mayor Zohran Mamdani. Experts believe that if this legislation, which many find controversial, is enacted, Amazon will likely follow through with its threat.
The proposed Delivery Protection Act would require Amazon to hire around 5,000 delivery workers currently employed through third-party contractors. Supporters argue that this legislation will enhance pay and improve safety for workers at Amazon as well as other delivery services like FedEx and DoorDash.
However, Amazon doesn’t directly employ delivery workers in any part of the country, and it has historically resisted changes to its labor practices both in the U.S. and internationally. According to analysts, this might not only lead to the relocation of those 5,000 delivery jobs outside the city but also result in Amazon closing its 15 last-mile warehouses in New York and terminating an additional 2,000 employees who work there.
Recently, Amazon shut down seven warehouses in Quebec during a labor dispute involving one of its last-mile hubs. The union representing workers in that area had successfully organized their 300-member workforce, leading to significant job losses within months.
“Amazon will retaliate, because it has to send a firm message to the rest of the country that ‘If you mess with us, this is what will happen,’” remarked Marc Wulfraat, a logistics consulting expert. He emphasized that Amazon tends to close facilities when faced with union activities.
Currently, Amazon’s warehouses in Montreal are unoccupied, and the company continues to pay rent for over 1.6 million square feet of space that it built with significant investment. Some of these facilities are even being offered for sublease.
The Delivery Protection Act, initially proposed last year by Queens Council Member Tiffany Cabán and reintroduced, has garnered substantial backing with approximately 34 sponsors in the City Council. However, some council members, including Speaker Julie Menin, have expressed discomfort over potential job losses resulting from the bill.
“This bill will have to pass in some form,” a source familiar with the situation stated, hinting that the final legislation may not fully satisfy either side. Discussions have included potential compromises, like allowing independent contractors to continue deliveries while imposing more safety regulations on Amazon. Yet, no vote has been scheduled.
Experts note parallels between the situation in Quebec and that in New York, even as Amazon employs over 12,000 workers in various roles across New York—more than it did in Quebec at that time. The impact of the Delivery Protection Act would not extend to the approximately 5,500 workers at Amazon’s large JFK8 fulfillment center on Staten Island, who recently voted to unionize but lack a collective bargaining agreement.
Despite employing unionized workers overseas, Amazon has been in the spotlight for its resistance against unions in the U.S. since the pandemic, facing allegations of unfair labor practices in several locations. In April, the National Labor Relations Board mandated that Amazon engage in negotiations with the Teamsters in Staten Island, which the company has challenged legally.
“Amazon will say or do whatever it takes to deny workers stronger rights and wages,” the Teamsters asserted in a statement.
The potential repercussions of the Delivery Protection Act are apparent to the 40 independent companies that employ the city’s 5,000 delivery workers. Some business owners worry that Amazon could easily replace its New York facilities with warehouses in New Jersey, as has happened in past instances.
Litigation is ongoing for Amazon in Quebec, where the company denies that its warehouse closures were a reaction to unionizing efforts. A complaint filed by a union there is pending, but even a ruling against Amazon may result in little more than a fine.
A class action lawsuit has also been initiated by Amazon Prime customers in Quebec, alleging that closures led to delayed deliveries. A court has allowed the case to proceed, although plaintiffs acknowledge the service disruption was relatively short-lived.
In New York, Amazon has claimed that shutting its warehouses would lead to increased delivery times and prices. According to them, the operational framework of New York is distinctly different from that of Quebec due to the sheer volume of delivery locations.
Furthermore, Amazon has funded research suggesting that the Delivery Protection Act could impose a burden of over $664 annually on New Yorkers, further complicating the market.
A knowledgeable source indicated that should Amazon close its last-mile facilities in New York, the effects would be felt throughout the city’s delivery service, particularly impacting same-day ordering capabilities.
Amazon’s current last-mile facilities in the city include locations in Brooklyn, Queens, and Manhattan, all crucial for maintaining delivery efficiency.
“Amazon wouldn’t hesitate to shut down the 15 facilities in New York City if it perceived this legislation as a threat to its business model,” asserted logistics consultant Brittain Ladd, underscoring the potential for similar models to emerge in other cities.
The delivery businesses, however, feel they are being overlooked in this broader labor struggle. “It feels as though there’s a singular focus on penalizing Amazon without consideration for the impacts on us as small business owners,” lamented one business owner.
For those like Joe Artus, who have actively worked to employ marginalized communities, the Delivery Protection Act could spell the end for their businesses. With personal stakes involved, he emphasizes the potential human cost of such legislative changes.
