Logistics Layoffs Pile Up as Amazon Shutters Texas Air Cargo Hub

Glenn Taylor
·4 min read

Layoffs are still lingering within logistics across air and land.

With Amazon Air closing a cargo-handling facility in San Antonio, 65 employees at third-party contractor Worldwide Flight Services are losing their jobs, according to a Feb. 12 Worker Adjustment and Retraining Notification (WARN) Act Notice.

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Worldwide Flight Services, also known as WFS Express, wrote in a letter to the Texas Workforce Commission that the closure of its Kelly Field operations is expected to be permanent and that workers’ last day will be April 10.

Amazon has been using the site, located in Port San Antonio, to ship packages via air cargo since 2017.

“We’re always evaluating our operations to better serve our customers and have made the decision to stop operations at Kelly Field,” said an Amazon spokesperson. “Worldwide Flight Services is a valued partner and we’ll continue working with them at other locations. This decision will not impact customer deliveries in the San Antonio area.”

The layoffs represent a small portion of WFS staff, with the company employing 30,000 workers at 158 major airports worldwide.

Amazon had planned slight cutbacks across its air operations amid declining air cargo demand last year. In October 2023, the e-commerce giant shuttered its air freight facility at Leipzig/Halle International Airport in Germany, following a decision in July 2023 to reduce the number of flights it carries out in Europe. Amazon Air still currently operates 90 total jets.

Job cuts are also impacting a major third-party delivery provider just five months after going public.

Instacart laid off approximately 250 employees, or 7 percent of the delivery company’s workforce, as part of a restructuring designed to “flatten the organization,” said CEO Fidji Simo in a letter to shareholders.

Most of these job cuts are expected to occur by March 31, the company said in an SEC filing. The filing also said the layoffs will allow Instacart to better align its organizational structure with current business needs, strategic priorities and growth opportunities. The company had a total of 3,486 employees as of June 30, 2023.

The layoffs came amid a significant slowdown in ad revenue on a sequential basis, with sales in the “other” category increasing 7 percent in the fourth quarter, compared with 19 percent third-quarter growth.

Third-party logistics providers are feeling the heat of job cuts, as well. Columbus, Ohio-based ODW Logistics is closing one of its two Wisconsin plants, resulting in the layoff of 107 staff members. The 181,900-square-foot warehouse, located in Waukesha, Wisc., is closing following the loss of an unnamed, major client.

According to a WARN notice, 96 of the impacted employees will be salaried while 11 are hourly positions. The employees are not unionized. Layoffs will begin April 14, and will continue through the end of July.

ODW operates more than 30 distribution centers nationwide, totaling more than 8 million square feet.

And another 3PL, APL Logistics, unveiled in a WARN notice that 52 employees will lose their jobs when the company permanently closes operations a Lebanon, Tenn. warehouse on April 30. The logistics company will exit the 615,000-square-foot building after a partner, pet food company Hill’s Pet Nutrition, changed 3PLs.

Those who work in logistics are feeling the impacts of these cuts. According to survey from Descartes, 76 percent of supply chain and logistics leaders say they are experiencing notable workforce shortages in their operations. Thirty-seven percent of the 1,000 respondents described the workforce shortage they endure as “high to extreme.”

The areas suffering the most from resource shortages were transportation operations (61 percent) and warehouse operations (56 percent), the Descartes survey said.

Although the layoffs have been highly publicized across the industry, with UPS announcing 12,000 layoffs and GXO, Coyote and Flexe all revealing expected job cuts of their own in January, the month saw a spike in new positions.

Preliminary January data from the U.S. Bureau of Labor Statistics (BLS) shows that the wider transportation and warehousing industry saw a seasonally adjusted 15,500 thousand jobs added from December to 6.56 million. However, it appears more positions have yet to be filled, as the preliminary unemployment rate increased month over month from 4.3 percent to 4.7 percent.

Chris Jones, executive vice president, industry at Descartes, told Sourcing Journal earlier this month that “there are still way more jobs out there than there are people for them.”

Nevertheless, jobs across transportation and warehousing are well off their pandemic-driven highs, especially as warehouse space slows. Recent cases of apparel sellers like Fanatics and Fruit of the Loom highlight this shift, unveiling last month they would each be shuttering distribution centers, leaving the firms to cut staff at those locations.

While there are 6.56 million jobs in transportation and warehousing in January, it still represents a 100,000-employee reduction from the July 2022 high of 6.66 million, and a 53,400-employee decrease from Jan 2023.