According to CNBC, Amazon is undergoing a restructuring of its grocery store operations, leading to job cuts at some Fresh grocery stores. The first step in this restructuring involves eliminating the “zone lead” role, a lower-level management position responsible for overseeing specific store departments and assisting with employee training.
Amazon’s CEO, Andy Jassy, has been actively working on cost-cutting measures and has decided to put expansion plans on hold to concentrate on its brick-and-mortar strategy. Consequently, hundreds of Fresh employees will be laid off as part of this restructuring.
Improve employee efficiency and enhance customer value
An Amazon spokesperson, Jessica Martin, explained that the company regularly evaluates its store’s organizational needs to improve employee efficiency and enhance customer value, which led to the decision to evolve in-store staffing and operations.
The Washington Post reported that this reassessment resulted in the termination of hundreds of employees. Amazon currently operates 44 Fresh grocery stores across eight states and Washington, D.C.
These job cuts come after the company’s announcement of its largest layoffs in history, affecting approximately 27,000 employees since late last year, including staff working on grocery technologies and in the Fresh and Go units.
Amazon has been focusing on the grocery segment since its launch of the Fresh delivery service in 2007 and the acquisition of Whole Foods Market in 2017 for $13.7 billion. It subsequently introduced cashier-less Go stores and the Fresh supermarket chain.
Optimistic about the growth of Whole Foods Market
Earlier this year, following positive Q1 results, CEO Andy Jassy expressed optimism about the growth of Whole Foods Market and the profitability trajectory. As for Amazon Fresh, Jassy expects the pause in new brick-and-mortar establishments to yield positive results in the future. The company is currently working on various experiments and concepts across its stores with hopes of continuing its expansion strategy. However, up until now, the only action taken by Amazon is the closure of Fresh grocery stores and the elimination of positions.
According to CNBC, Amazon emphasized that for its brick-and-mortar grocery business to thrive, it must extend its presence beyond Whole Foods. The company aims to create a series of stores that can expand successfully, offering a well-curated selection, competitive prices, and convenient shopping experiences.
Regarding the Fresh employees affected by the job cuts, Amazon stated that they have the option to explore other positions within the company or receive a severance payment. Amazon’s spokesperson, Jessica Martin, informed FOX Business that the company is currently undergoing a restructuring of its in-store staffing and operations model specifically for its Amazon Fresh grocery stores.
Despite the company’s efforts to expand its grocery business, hundreds of workers at Amazon Fresh grocery stores were notified this week that their positions were being eliminated.
In response to these changes, Martin stated, “Like any retailer, we periodically assess our stores’ organizational needs and make decisions to increase efficiencies for our employees and deliver customer value.” She further explained that Amazon has chosen to evolve its in-store staffing and operations model to better cater to its customers and teams.
Regarding the impacted staff members, Amazon has offered them the option to apply for other positions within the company or accept a severance package.