Amazon shutters some India businesses amid global cuts
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AMAZON will wind down parts of its Indian operations – showing that not even the crucial growth market with 1.4 billion consumers is immune to chief executive Andy Jassy’s cost-reduction campaign.
The company said it will exit meal deliveries as well as a service providing bulk doorstep deliveries of packaged consumer goods to small businesses. The exits will result in several hundred layoffs and leave Amazon reliant on its core offerings such as online retail in India, said a person familiar with the matter, who asked not to be named.
Job losses in the country are likely to be in the low hundreds, the person said, or just a fraction of Amazon’s India e-commerce workforce of over 10,000. Overall, Amazon employs more than 100,000 people full-time in the country for its worldwide operations.
Jassy is reducing expenses and jobs around the world amid slowing growth in several areas of Amazon’s business. In India, the pullback underscores Amazon’s struggles in one of the world’s fastest-growing e-commerce markets, where it is facing regulatory heat and competition from homegrown conglomerates Reliance Industries and Tata Group, as well as Walmart’s Flipkart.
After ploughing billions of dollars in everything from grocery delivery to payments in India during the past decade, Amazon has failed to achieve the sort of dominance it enjoys in markets such as the US.
The company projected the smallest revenue increase ever for its holiday quarter, and Jassy has imposed a hiring freeze on some corporate roles and shut down several experimental and smaller programmes.
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Globally, Amazon plans to cut about 10,000 jobs, its largest headcount reduction, people familiar with the matter have said.
In India, the company has attracted the wrath of a labour union assembling tech workers for making what it calls “voluntary separation” offers and giving employees limited time – only until Dec 6 – to decide. Amazon itself does not have a labour union.
Several projects in beta testing are also likely to be shelved, said the person. Amazon has announced that its Amazon Academy learning platform, which offers online test prep resources for students trying to enter India’s medical and engineering schools, will shut down in the coming months.
Amazon launched Amazon Food, the meal delivery service it is now shuttering, in India in 2020. It offers food from restaurants and other providers serving everything from paratha stuffed bread to McDonald’s burgers and fries. Amazon’s business-customer unit will continue to provide small retailers and bulk buyers with goods such as groceries and medical supplies, but will no longer offer doorstep delivery of packaged consumer goods.
“We are discontinuing these programmes in a phased manner to take care of current customers and partners,” the company said. “We remain committed to India and will continue to invest across those areas where we can bring value to our customers.”
In the last decade, Amazon has added millions of sellers to its platform in India and expanded in segments like groceries and digital payments, while selling fashion, beauty products and flight tickets. The company said groceries, consumer electronics, fashion and business-to-business offerings will be among its focus areas in India. BLOOMBERG
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