Amazon is laying off hundreds of its grocery workers
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Amazon is laying off hundreds of its grocery workers

Hundreds of grocery store staffers who work for Amazon Fresh found out their jobs were being permanently eliminated on Tuesday.

Amazon operates 44 Amazon Fresh stores in the U.S. cities including Los Angeles, Philadelphia and Naperville, Ill. The positions being cut are “zone leads” who manage sections of individual stores, according to three former Amazon Fresh employees who spoke on the condition of anonymity to protect their careers. Staff were told the cuts were part of a cost reduction plan, the people said.

Laid-off employees won’t report to work after Tuesday but are being paid for 60 days, a former Amazon employee said.

The layoffs come as economic uncertainty drives Amazon to cut costs across its operations and to home in on a profitable model for its grocery businesses in particular — an industry the company continues to pursue despite its retreat from other brick-and-mortar retail businesses.

In a statement, Amazon spokesperson Jessica Martin said the company is making changes as it evaluates Amazon Fresh’s performance.

“As a result, we’ve decided to evolve our in-store staffing and operations model to better serve our customers and teams,” Martin said. “We remain committed to our grocery business, and we’re working closely with affected employees to help them find new shifts or roles within Amazon.”

Impacted staff can apply for other positions within Amazon or accept a severance payment.

(Amazon founder Jeff Bezos owns The Washington Post. Interim CEO Patty Stonesifer sits on Amazon’s board.)

Amazon launched Amazon Fresh as a delivery-only brand in 2007. Ten years later, it acquired Whole Foods for $13.7 billion, hoping to learn how to successfully operate a grocery chain. In 2020, it began opening physical Fresh stores, including more than a dozen in the United Kingdom.

But recently, Amazon has been reevaluating that expansion. As the tech giant has tried to rein in growth and cut costs following the online shopping frenzy at the height of the coronavirus pandemic, it has laid off thousands of workers, reorganized its logistics network, and killed various projects and divisions. In spring 2022, Amazon announced that it was scaling back in retail, eliminating Amazon Books and 4-Star stores, and reducing the number of Amazon Go convenience stores.

Amazon CEO Andy Jassy has said the company is committed to making grocery work. But in an earnings call this year, he said the company would pause the opening of new physical Fresh locations while it reevaluates strategy and tries to find a way to turn Amazon Fresh into a financial success.

The job eliminations at Amazon Fresh come in the midst of a year of job cuts throughout the tech industry. Amazon has so far laid off 27,000 workers in 2023, making deep cuts in human resources, advertising, gaming and even its core moneymaking division: cloud computing. Facebook parent company Meta has laid off more than 20,000 workers this year, Microsoft has laid off 10,000, and Alphabet has cut 12,000.

Amazon Fresh’s cashier-less technology, called Just Walk Out, plus computerized shopping carts and Alexa voice-assistant kiosks were supposed to help the brand stand out in the crowded grocery field. But two former employees who spoke to The Post on the condition of anonymity to protect their jobs said customers are often more confused and frustrated by the technology than attracted to its convenience. Despite frequent sales, such as recent Prime Day price cuts, Amazon Fresh has struggled to get customers into its stores, the former employees said.

In the February earnings call, Jassy said, “We’re doing a fair bit of experimentation today in those stores to try to find a format that we think resonates with customers.”

A “zone lead” in Illinois who spoke on the condition of anonymity while she’s still being paid by Amazon said she found out that she was losing her job on Tuesday. She and other employees in her store received a message telling them not to report to work for their normal shifts. Instead, they were instructed to dial in to a conference call where a district manager told them that their jobs were being cut as part of a “reduction in force.”

Though they knew the store had been struggling, they were nonetheless “distraught,” the employee said. There are open jobs at an Amazon warehouse 30 miles away, but she’s not sure she’ll apply given the cost of the commute.

The employee’s tasks as a “zone lead” included stocking shelves, which she said have to be meticulously organized to line up with the cameras that enable the Just Walk Out technology. According to previously posted job listings, other “zone leads” were tasked with answering customer questions, stocking shelves, managing inventory and training new employees.

“Zone leads” worked hard to keep Amazon Fresh stores running, the employee said.

“People in that position are key players that keep it together,” she said. “I can’t help but think about the people left behind.”

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