This follows a recent decision to shutter its
fledgling edtech unit by next year.
“After a careful evaluation, we have decided to discontinue Amazon Food from Dec 29, 2022. This decision means that you will no longer get orders from customers via Amazon Food after this date. You will continue to receive orders till then and we expect you to continue fulfilling those orders,” Amazon told restaurant partners.
“Please be assured Amazon is committed to meet all its payments and other contractual obligations and will support you through this transition. You will have access to all Amazon tools and reports till Jan 31, 2023. We will also provide support till March 31, 2023 for any compliance related queries,” it added.
A spokesperson for Amazon India confirmed the development.
“As part of our annual operating planning review process, we have made the decision to discontinue Amazon Food, our pilot food delivery business in Bengaluru. We don’t take these decisions lightly. We are discontinuing these programmes in a phased manner to take care of current customers and partners and we are supporting our affected employees during this transition,” the spokesperson said in response to a query by ET.
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Amazon started its food delivery business in select pin codes of the city in 2020 and gradually scaled it across most of Bengaluru.
However, restaurant partners said they never saw much traction in order volumes from Amazon.
“Most of my order volumes came from Zomato and Swiggy, and Amazon was not even in double digits in terms of contribution to my overall volumes,” a senior executive at one of the largest cloud kitchen brands in India told ET.
Sources said Amazon has also seen redundancies in its pharmacy business as part of recent layoffs and this will also be evaluated for viability going forward.
“Amazon remains focused on providing our growing customer base the best online shopping experience with the largest selection of products at great value and convenience. We remain committed to India and will continue to invest across those areas where we can bring value to our customers including Grocery, Smartphones and Consumer Electronics, Fashion & Beauty, as well as our B2B offerings such as Amazon Business,” the spokesperson for Amazon India added.
ET was the first to report about layoffs at its India team.
At least a few hundred employees have been impacted, but the cuts could run “deeper” in India.
Globally, Amazon is laying off at least 10,000 employees, according to a
report in the New York Times.
In September, research firm Bernstein published a report critical of Amazon India, saying that the company’s performance in the country was “mixed”, with continued losses despite pumping in $6.5 billion.
While the Amazon India marketplace, Amazon Seller Services,
was able to cut losses by almost 23% to Rs 3,649 crore in FY22, losses at its other two businesses – payments and logistics – have widened.
According to the Bernstein report, Amazon has struggled to grow business significantly in high-margin categories such as fashion and beauty and personal care, which are dominated by rivals Flipkart and Nykaa, respectively.