Canada warned Amazon (AMZN) it is reviewing federal government contracts with the company’s cloud computing division following its decision to shut down warehouses and lay off 1,700 workers in Quebec.
Invest with Confidence:
- Follow TipRanks' Top Wall Street Analysts to uncover their success rate and average return.
- Join thousands of data-driven investors – Build your Smart Portfolio for personalized insights.
In a letter posted on the social media platform X, Industry Minister Francois-Philippe Champagne asked Amazon CEO Andy Jassy to reconsider the decision, voicing “strong disappointment” at the plans announced on Wednesday.
Amazon said it will shutter warehouses in the French-speaking province over the next two months and return to a third-party delivery model, amid claims by labor organizations that it was linked to employees trying to unionize.
Champagne wrote to Jassy that the decision was “inconsistent with your expressed interest in being a leader and strategic partner within Canada’s industrial economy,” and “raises questions about your commitment to Canada.”
The Industry Minister signed off the letter with a barely veiled threat to Amazon, saying: “You will undoubtedly understand that such action calls for a review of the business relationship that exists between Amazon and the Government of Canada.”
AMZN Plans Linked to Unionization
Amazon announced this week that it would close all seven of its warehouses in Quebec, raising concerns that it was linked to labor unionization efforts.
In May around 240 Amazon workers at a warehouse in the Montreal suburb of Laval unionized. They were the first of the company’s Canadian warehouse workers to do so and labor representatives believe the decision to shut the facilities in Quebec is designed to prevent more workers across the country unionizing.
Amazon subsequently lost a labor tribunal in October challenging the unionization of the warehouse workers.
Is AMZN a Good Stock to Buy?
On Wall Street, analysts have a Strong Buy consensus rating on AMZN stock based on 49 Buys and one Hold assigned in the past three months. After a 50% rally in its share price over the past year, the average AMZN price target of $253.28 per share implies 7% upside potential.
