Amazon Cutting 18,000 JOBS Why they are Closing stores and laying Off
Amazon Cutting 18,000 JOBS Why they are Closing stores and laying Off
Amazon is making significant changes to its grocery business, with plans to close a number of its Fresh supermarkets and Go convenience stores as it re-evaluates its strategy and looks for ways to reduce costs. Amazon's finance chief, Brian Olsavsky, noted that the company continuously refines its store formats to find ones that resonate with customers, build its grocery brand, and allow it to scale over time. As part of this process, the company will exit certain stores with low-growth potential, resulting in a \$720 million impairment charge in the fourth quarter of 2021.
In addition, Amazon will temporarily halt the expansion of its line of Fresh grocery stores until it can find a format that differentiates its offering from others in the industry. CEO Andy Jassy said that Amazon's stores need to resonate with customers and the company needs to be in a position where it likes the economics before expanding them more expansively, which it expects to achieve in 2023.
Currently, Amazon operates several dozen Fresh grocery stores and 28 Amazon Go convenience stores. However, a report from The Information in December 2021 suggested that some U.S. Amazon Fresh stores sat vacant, indicating a pullback in the company's grocery strategy, Amazon Cutting 18,000 JOBS Why they are Closing stores and laying Off
Despite the changes, Jassy remains bullish about Amazon's grocery business and pleased with the progress Whole Foods has made on profitability in the past year. However, Amazon is cutting costs after an extended period of outsized expansion, and is currently in the process of eliminating 18,000 jobs, including across much of its grocery portfolio.
Amazon Cutting 18,000 JOBS Why they are Closing stores and laying Off
Last year, Amazon announced it would shut all its Amazon Books, 4-star, and Pop Up shops as it slimmed down its physical stores portfolio. The company has also added delivery fees to some orders placed through Amazon Fresh online and a service fee for Prime members who want home delivery from Whole Foods.