Dive Brief:
- Amazon is merging the corporate teams behind its Amazon Go convenience stores and Amazon Fresh grocery business, a company spokesperson confirmed to sister site C-Store Dive on Tuesday.
- The company conducted an internal review of both brands’ teams and confirmed that various roles in its Worldwide Grocery Stores division, which includes Go and Fresh, were no longer required, the spokesperson said. They did not specify which positions nor how many roles were eliminated, but shared that the merger resulted in “a very small” number of layoffs across both teams.
- Amazon has struggled to sustain a profitable physical retail division in recent years, and the blending of its corporate c-store and grocery teams may foreshadow more changes for one or both of these segments.
Dive Insight:
The latest changes at Amazon Go and Amazon Fresh reflect broader shifts happening across the company. In a public letter sent to Amazon’s employees last September, CEO Andy Jassy announced that the company would be cutting some middle managers as a means to improve efficiency. Jassy reiterated this message a few weeks ago during an interview with Bloomberg.
That initiative seems to have made its way to Amazon’s retail teams. According to two people familiar with the matter, Amazon’s vice president of retail, Claire Peters, hosted a video call in late February informing impacted employees that their roles would be eliminated.
Amazon confirmed on Tuesday that impacted employees in the U.S. will receive their pay and benefits for at least the next 60 days, as well as job search support and access to transitional health benefits. They’ll also be eligible for severance.
These changes come after a bumpy few years for Amazon’s physical retail arm. Amazon Go has shuttered over half of its locations across the U.S. over the past few years as a cost-cutting measure, dropping from as many as 30 stores in early 2023 to about 15 today. And although Amazon Fresh eclipsed the 60-store mark last year, the grocery chain had to pause the rollout of all new stores in 2023 due to economic difficulties.
Amazon’s spokesperson emphasized that despite these setbacks, the company will continue to invest in its grocery and c-store business.
The merging of these corporate teams also comes about six weeks after Amazon appointed Whole Foods Market CEO Jason Buechel head of its Worldwide Grocery Stores division, which includes Amazon Go, Amazon Fresh and Whole Foods. Amazon’s spokesperson said on Tuesday that the latest structural changes are unrelated to Buechel’s promotion.
Correction: A previous version of this story misspelled Jason Buechel’s surname.
