Amazon bucks global tech slowdown with UAE expansion

Amazon

• New Dubai fulfilment centre will increase UAE storage capacity by 70%
• The e-commerce giant is set to cut 27,000 jobs worldwide

Amazon has strengthened its commitment to the UAE with the opening of a new fulfilment centre – in the same week the e-commerce giant announced 9,000 jobs are to go across its global network.

This follows a previous announcement in January to cut 18,000 roles within the company.

The latest redundancies will fall mostly in the Amazon Web Services, Twitch live streaming, advertising and PXT technology and experience solutions divisions, according to an update from CEO Andy Jassy.

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“This was a difficult decision, but one that we think is best for the company long term,” he said.

Despite the intense pressures on the tech sector across the world – earlier this month Facebook parent Meta Platforms announced plans to cut 10,000 jobs this year – the Middle East continues to buck the trend.

Amazon’s new fulfilment centre, in Dubai South’s Logistics District, has a storage capacity of 2.1 million cubic feet, which will increase Amazon’s total storage capacity in the UAE by 70 percent.

Ronaldo Mouchawar, vice president of Amazon Mena, said the addition of the new centre was evidence that the company was continuing “to invest in building the UAE’s talent capabilities, creating diverse career paths in an industry-leading workplace”.

Mouchawar co-founded Souq.com in 2005. It became the largest online retailer in the Arab world and when Amazon acquired Souq in 2017, Mouchawar took on his current role. The Syrian entrepreneur is also a veteran of Maktoob, the internet portal bought by Yahoo in 2009.

The new facility will include close to 3km of conveyance equipment, spread across five floors, covering an area of more than 350,000 sq ft.

Amazon recently announced plans to host products from 100,000 businesses, including local small and medium-sized companies, on its UAE website Amazon.ae by 2026, in support of the Dubai Economic Agenda D33 to make Dubai a global digital economy.

Helal Al Marri, director general of the Dubai Department of Economy and Tourism, said he welcomed the ongoing expansion of Amazon “and its catalysing role in the wider development of an economy centred on innovation and technology that enables talent”.

The value of the UAE’s e-commerce market is expected to reach $9.2 billion in 2026, while its share of total retail sales is projected to reach 12.6 percent by the same year, according to analysis from Dubai Chamber of Commerce.

The centre’s opening comes ahead of Ramadan, when retail sales in Mena are set to rise to $66 billion, up $5 billion compared with last year, according to Redseer Strategy Consultants.

The UAE’s household spending will grow by a real rate of 4 percent year-on-year in 2023, Fitch Solutions’ Consumer Spending Outlook predicts – the same as in 2022.