Amazon aims to save $1.3 billion by reducing office vacancies over 3-5 years. Various strategies include lease expirations, floor discontinuation, and cost-cutting measures impacting the struggling real estate market and employee compliance challenges.
Amazon expects to save approximately $1.3 billion over the next three to five years by significantly reducing office vacancies, according to an internal document obtained by Business Insider and a person familiar with the matter.The giant plans to achieve this by allowing certain leases to expire naturally, discontinuing the use of some office floors, and negotiating early lease terminations for specific buildings. „We’re constantly evaluating our real-estate portfolio based on the dynamic and diverse needs of Amazon’s businesses by looking at trends in how employees are using our offices,“ said Brad Glasser, a spokesperson for Amazon, in an email to Business Insider.Amazon currently has an office-vacancy rate of 33.8%, expected to drop to 25% in 2024 and further decrease to 10% over the next three to five years, resulting in an estimated $1.3 billion in annual operating expense savings, per the internal document.According to the anonymous source, the high office vacancy rate is attributed to slower growth and layoffs.
