New Delhi: After shutting down of edtech and food delivery verticals, US giant Amazon on Monday decided to shut down a portion of its operations in India, reported Bloomberg. The company said that it is ending meal deliveries and a service that delivered packaged consumer goods in bulk to small businesses' doorsteps.
According to a person familiar with the situation, the exits will result in only a few hundred layoffs from a workforce of thousands, leaving Amazon dependent on its core offerings, such as online retail in the country.
As Amazon's growth slows in a number of areas, Chief Executive Officer Andy Jassy is cutting costs and cutting jobs all over the world.
The pullback in India demonstrates Amazon's difficulties in one of the world's fastest-growing e-commerce markets, where it is competing with homegrown conglomerates Reliance Industries Ltd. and Tata Group as well as Walmart Inc.'s Flipkart and is subject to regulatory pressure.
The company has invested billions of dollars in everything from grocery delivery to payments over the past decade in India, but it has not been able to establish the kind of dominance it enjoys in markets like the United States.
A person who requested anonymity to discuss internal deliberations stated that several beta-testing projects are also likely to be put on hold. Amazon has announced that its Amazon Academy learning platform, which provided students vying for admission to India's medical and engineering schools with online resources for test preparation, will cease operations in the coming months.
The individual stated that job losses in the nation are likely to be in the low hundreds or a small portion of Amazon's over 10,000 India e-commerce workforce. For its global operations, Amazon employs over 100,000 full-time workers in the nation.
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The company has drawn the ire of a tech workers' union because it made "voluntary separation" offers and gave employees only until December 6 to make a decision. There is no union at Amazon itself.
People who are familiar with the situation have stated that Amazon intends to eliminate approximately 10,000 jobs worldwide—the company's largest-ever headcount reduction. Jassy had halted several experimental and smaller programs and imposed a hiring freeze on some corporate positions, as well as projected the smallest-ever revenue increase for its holiday quarter.
Small retailers and bulk buyers will still be able to purchase groceries and medical supplies from Amazon's business-customer unit, but packaged consumer goods will no longer be delivered to their doors.
"We are discontinuing these programs in a phased manner to take care of current customers and partners," the company said in an emailed statement, quoted by Bloomberg. "We remain committed to India and will continue to invest across those areas where we can bring value to our customers."
In 2020, the meal delivery service Amazon Food, which it is now discontinuing, was introduced in India. It serves everything from paratha-stuffed bread to McDonald's burgers and fries from restaurants and other vendors.