This week, Amazon announced that it will be laying off a few hundred employees in a number of its healthcare divisions, including One Medical, a primary care provider, and Amazon Pharmacy.
Resources within the company’s healthcare offerings will be reorganized, notwithstanding Senior Vice President Neil Lindsay’s speech to Amazon Health Services workers mentioning excellent momentum and positive consumer feedback.
This announcement highlights the pattern of tech companies continuing to lay off employees in 2024—Amazon included. The firm has reduced positions at Prime Video and laid off 35% of its Twitch employees just this year.
Making Way For Innovation
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Lindsay cited the 96% customer satisfaction rating in the marketplace in a statement and memo to staff members.
All of our health care businesses have had an extremely exciting year, and Amazon Pharmacy, One Medical, and Amazon Clinic have all experienced remarkable growth. We completely redesigned the Amazon Pharmacy in 2023 to provide clients with a more easy and cost-effective way to obtain the prescription drugs they require.
Still, hundreds of positions are being removed in spite of the favorable client mood. In fact, the company intends to realign some resources to help expedite our efforts to deliver the best experience for our patients, customers, and members. In fact, the corporation cited consumer input as the basis for these job losses.
It is anticipated that these resources would be used to enhance the overall experience and foster customer innovation.
Lindsay promised that everyone impacted by the job losses will receive cash support, continuance of benefits, and career advice. They will also have the chance to apply for new positions inside the company.
Online Pharmacy Leader
For quite some time, it has been clear that Amazon wants to become the market leader in the $300 billion U.S. pharmacy industry.
In 2018, the digital behemoth made a foray into the healthcare sector when it paid $753 million to acquire the prescription-by-mail startup PillPack.
It then revealed that it has reached a major agreement to pay $3.9 billion in 2022 to acquire One Medical, a primary care company. After the acquisitions of Hollywood studio MGM for $8.5 billion in 2022 and Whole Foods for $13.7 billion in 2017, this all-cash deal was the company’s third-largest acquisition in history.
Prescription drugs are available for home delivery through the Amazon Pharmacy service. Prime members can take advantage of free two-day delivery and up to 80% off savings on over-the-counter purchases.
Redundancy Count Rises
Just last year, 27,000 positions were eliminated by Amazon across the board. Furthermore, the corporation has added more redundancies to its studio, gaming, and streaming operations.
It appears that the main justification for these job cutbacks is organizational reorganization intended to increase efficiencies.
When the company’s quarterly results were released last week, Amazon’s Chief Financial Officer, Brian Olsavsky, said, “We are investing, and we are adding in some areas,” during a reporter conference call. However, most teams have a general consensus that we want to maintain the current level of headcount—if not reduce it as we increase efficiency.
With 1,525,000 employees at the end of the fourth quarter, Amazon is still behind its goal of 1.6 million employees from 2022, despite a minor increase from the third quarter.
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