Amazon is reorganizing its grocery store operations, resulting in job cuts at some Fresh stores, CNBC reports. Amazon CEO Andy Jassy has been working to cut costs and has been vocal about pausing expansion plans in order to focus on its brick-and-mortar strategy. As such, hundreds of Fresh employees will be let go.
The restructuring has resulted in the elimination of the “zone lead” role, which is a lower-level management position that has the responsibility to oversee specific store departments, as well as assist with training new employees.
“Like any retailer, we periodically assess our stores’ organizational needs and make decisions to increase efficiencies for our employees and deliver customer value,” Jessica Martin, an Amazon spokesperson, said in a statement to CNBC. Martin said that as a result, the company has decided to evolve in-store staffing and operations.
These Fresh job cuts come after the company announced its most expansive layoffs in its history with about 27,000 employees since late last year, with some staff working on grocery technologies, as well as some in the Fresh and Go units.
Amazon has been targeting the grocery segment since it launched its Fresh delivery service in 2007, then acquired the Whole Foods Market brand in 2017 for $13.7 billion. It launched a line of Go cashierless stores and then its Fresh supermarket chain.
Earlier this year after reporting strong Q1 results, Jassy said that Whole Foods Market continues to grow nicely and that there were a number of changes in the past year that have changed the profitability trajectory. As for Amazon Fresh, Jassy hopes the pause in establishing new brick-and-mortars will pay off down the line. The CEO said a set of experiments and concepts are being worked on across a number of stores and the hope is to continue with an expansion strategy. However, so far all Amazon has done is close Fresh stores and eliminate positions.
Amazon said to CNBC that to have a successful brick-and-mortar grocery business the company has to establish a presence beyond Whole Foods, with a line of stores that are able to scale, while also being tailored toward selection, value, and convenience.
Amazon said that Fresh employees impacted by the layoffs could look for new roles within the company or accept a severance payment.