Amazon will shut down Kansas warehouse in February 2015
Amazon announced Oct. 1 that it will be shutting down its warehouse in Coffeyville, Kansas, come February. Hundreds of workers will be affected as the company turns down a multimillion-dollar incentive package state and local officials prepared to get it to stay.
As one of the largest employers in southeast Kansas, Amazon set up shop north of Coffeyville in 1999. At the time, the company was avoiding hefty state taxes so a rural location was best. Unfortunately for Coffeyville and Kansas, saving on taxes is no longer a priority for Amazon.
Instead, it is more interested in establishing warehouses close to big cities, realigning its national distribution network to make sure orders are delivered promptly to customers. Amazon's Prime service, for instance, guarantees two-day deliveries.
That and Amazon has also reached deals with populous states like California, New York, and Texas. With these deals, not only will the company be physically closer to its customers, it will also enjoy a holiday period on tax collection, allowing it to save on sales taxes for building warehouses and employing people from the said states.
"This is not a decision we made lightly and we are committed to supporting our employees through this transition. We regularly evaluate our network to ensure we're placing fulfillment centers as close to our customers as possible," said Amazon spokesperson Ashley Robinson in an email statement.
Local and state officials in Kansas had known about Amazon's intentions to move for months so they tried to come up with the most attractive incentive package they could. The company's decision not to accept it is a definite blow to the economy in Coffeyville, but more so because it comes at a time when other employers have either chosen to move out as well or are having troubles of their own.
In March, Southwire, a cable and wire maker, announced that it will be laying off close to 200 people as it closes its plant in Coffeyville. In August, John Deere followed suit, and is scheduled to let go 38 workers as demand for farm machinery slows down. Oil refinery Coffeyville Resources is staying put, but it had to shut down production in July when a fire hit.
When Amazon moves out of Coffeyville, 600 to 700 full-time employees will lose their jobs, and there will be no prospects for the hundreds of temporary positions Amazon filled during the holiday season. Affected individuals were informed Tuesday.
While rare, Amazon has closed several warehouses before, the most recent of which was in 2011 in Irving, a city in Dallas County, Texas. Two years earlier, the company also shut down warehouses in Pennsylvania, Nevada, and Indiana.