Amazon has confirmed this week that it will cut “a few hundred” jobs across its healthcare units, including Amazon Pharmacy and the primary care company One Medical.
Despite Senior Vice President Neil Lindsay’s mention of “strong momentum and positive customer feedback” in a statement to employees at Amazon Health Services, resources within the company’s healthcare offerings will be “realigned.”
This announcement underscores the ongoing trend of tech layoffs in 2024, with Amazon being no exception. This year alone, the company has made 35% of its Twitch staff redundant and implemented cuts to roles at Prime Video.
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In a statement and memo to employees, Lindsay referred to the marketplace’s 96% customer satisfaction rating.
“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”.
However, despite such positive customer sentiment, hundreds of roles are still being eliminated. In fact, customer feedback was cited as the reason for these job losses, with the company aiming to “realign some resources to help accelerate our efforts to deliver the best experience for our patients, customers, and members.”
These resources are expected to be directed towards customer innovation and improving the overall experience.
Lindsay assured that financial support, benefit continuation, and career assistance will be provided to all affected by the job losses. Additionally, they will have the opportunity to apply for new roles within the organization.
Online Pharmacy Leader
Amazon’s aspirations to establish itself as a leader in the U.S. pharmacy market, valued at approximately $300 billion, have been evident for some time.
In 2018, the tech giant entered the healthcare arena by acquiring the prescription-by-mail company PillPack for $753 million.
Subsequently, it announced a significant deal to acquire the primary care company One Medical for $3.9 billion in 2022. This all-cash transaction marked the company’s third-largest acquisition in history, following the purchases of Whole Foods for $13.7 billion in 2017 and Hollywood studio MGM for $8.5 billion in 2022.
The Amazon Pharmacy service offers prescription medications for home delivery, with Prime members enjoying free two-day delivery and discounts of up to 80% on medications purchased without insurance.
Redundancy Count Rises
Amazon cut a total of 27,000 jobs companywide just last year. Additionally, both the company’s gaming and streaming and studio operations have also implemented further redundancies.
It seems that organizational restructuring aimed at driving efficiencies is the primary rationale behind these job cuts.
During a reporter conference call following the publication of the company’s quarterly results last week, Amazon’s Chief Financial Officer Brian Olsavsky remarked, “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 even decrease it as we can drive efficiencies.”
Amazon concluded its fourth quarter with 1,525,000 employees, a slight increase from the third quarter but still below its peak of 1.6 million employees back in 2022.