Amazon has this week confirmed that “a few hundred” jobs across its healthcare units will be cut. This will be at Amazon Pharmacy and the primary care company One Medical.
Despite the “strong momentum and positive customer feedback” as mentioned by Amazon Health Services Senior Vice President Neil Lindsay in a statement to employees, resources within the company’s healthcare offerings will be “realigned”.
This announcement highlights that the trend for tech layoffs in 2024 remains ever present, with Amazon itself no stranger to cutting jobs. This year alone it's made 35% of its Twitch staff redundant alongside cuts to roles at Prime Video.
Making Way For Innovation
In a statement and memo to employees, Lindsay referenced the 96% customer satisfaction rating of its marketplace:
“The past year has been incredibly exciting for all of our health care businesses, and we’re seeing tremendous growth for Amazon Pharmacy, One Medical, and Amazon Clinic. We reinvented the Amazon Pharmacy experience throughout 2023 to make it more affordable and convenient for customers to get the prescription medications they need”.
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Such positive customer sentiment hasn’t been enough to halt the elimination of hundreds of roles, however. In fact customer feedback was cited as the reason for job losses, in that the company is “realigning some resources to help accelerate our efforts to deliver the best experience for our patients, customers, and members”.
Those resources are likely to be invested into customer innovation and experience.
Lindsay did state that financial support, benefit continuation, and career assistance will be available for all affected by the job losses. They will also be given the chance to apply for new roles within the organization.
Online Pharmacy Leader
Amazon’s efforts to become a leader in the U.S. pharmacy market – estimated to be worth around $300 billion – have been apparent for some time now.
Back in 2018 the tech giant dipped its toe in the healthcare field when it acquired prescription-by-mail company PillPack for $753 million.
Following this it announced a deal to acquire primary care company One Medical for $3.9 billion in 2022. The all-cash deal was the company’s third largest acquisition in its history, following the 2017 purchase of Whole Foods for $13.7 billion, and the 2022 purchase of Hollywood studio MGM for $8.5 billion.
The Amazon Pharmacy service provides prescription medications for home delivery, with Prime members eligible for free two-day delivery and discounts up to 80% on medications bought without insurance.
Redundancy Count Rises
It would appear that organizational restructuring to drive efficiencies is the main rationale behind the redundancies.
On a reporter conference call following the publication of the company’s quarterly results last week, Amazon’s Chief Financial Officer Brian Olsavsky stated: “We are investing, and we are adding in some areas. But there’s a general feeling in most teams that we’re looking to hold the line on headcount, perhaps go down as we can drive efficiencies.”
Amazon ended its fourth quarter with 1,525,000 employees, which is slightly up from its third quarter but still below its high of 1.6 million employees back in 2022.