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Amazon layoffs linked to delivery operations

Move seen as a result of consolidation of Prime Now and AmazonFresh

In a rare move, Amazon.com announced this week it is laying off “several hundred” employees at its Seattle headquarters, largely the result of efforts to consolidate its Amazon Prime Now and AmazonFresh delivery services. According to reports, the merger of the two consumer retail business units could eventually streamline a delivery experience for Amazon’s Whole Foods Market subsidiary.

Amazon, in a statement to SN, said the reductions “are small changes to various business throughout the organization, not condensed to any specific business units.”

In addition to the layoffs in Seattle, hundreds more are reportedly being let go globally. Employees losing their jobs have been given 60 days to find another internal position before leaving the company.

“As part of our annual planning process, we are making headcount adjustments across the company – small reductions in a couple of places and aggressive hiring in many others,” Amazon told Supermarket News in a statement. “For affected employees, we work to find roles in the areas where we are hiring.”

Amazon noted that it currently has 3,900 job openings in Seattle today, and 12,000 worldwide on a corporate level. Excluding Whole Foods, Amazon created 130,000 jobs last year and continues to hire. Over the past five months it has secured at least 1 million square feet of additional space in Seattle, “which will allow us to host [thousands] of employees more (at least 5,000) – a sign we will keep hiring here.”

AmazonFresh was launched in Seattle in 2007, with the promise of same-day and early-morning delivery of perishables, including produce, and today operates in five regions. According to a posting on its website for a quality assurance engineer, at AmazonFresh, “Customers order fresh produce, locally-sourced meat and seafood, products from iconic local merchants, and other goods; select the time slot of their choice for delivery; and find our trucks at their homes when the time arrives. You say you want a bunch of bananas, a dozen bagels from your local bakery, lox, and a coffee maker delivered to your doorstep between 8 a.m. and 9 a.m. tomorrow? We say no problem.”

But Amazon one-upped itself with the launch of Prime Now in 2014, where consumers could get free two-hour delivery.

Prime Now is currently available in a dozen metropolitan areas across the country. According to a survey conducted by Morgan Stanley, 48% of Prime Now customers are now ordering grocery items with their other purchases. The growth is gradually making AmazonFresh obsolete.

According to a news report, since its acquisition of Whole Foods last summer, Amazon has scaled back AmazonFresh in more than 10 states. The job listings page for AmazonFresh only showed three job openings, and they were posted last year.

As reported, earlier this month Amazon introduced free two-hour delivery of select items from Whole Foods for Prime Now members in select neighborhoods in Cincinnati, Dallas, Virginia Beach and Austin, Texas. “Ultra-fast” delivery of under one hour is available for an additional charge of $7.99 on orders of $35 or more. Amazon expects to roll the service out further across the country this year.

According to a report on CNBC, Greg Greeley, vice president of Amazon Prime and delivery experience, has been assigned more responsibility at Whole Foods. Also in December it was reported that Stephanie Landry, vice president and head of Amazon Prime Now, was also given responsibility for AmazonFresh and Amazon Restaurants.

Speculation has risen that in the near future Prime Now will be used for the delivery of general merchandise along with groceries from Whole Foods.

“Over time, you’ll see more cooperation and more working together between AmazonFresh, Prime Now and Whole Foods as we explore different ways to serve the customer,” Brian Olsavsky, CFO at Amazon said during an October earnings call.

This story has been updated to reflect a change in the price of two-hour delivery under Prime Now.

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