Amazon Now To Shut Down Its Distribution Unit In India After Edtech, Food Delivery

After deciding to shut down its edtech and food delivery verticals, ecommerce major Amazon now wants to close down its ‘Amazon Distribution’ vertical in India.

Amid global macroeconomic headwinds, this decision comes as a part of the annual operating planning review process of the company, Business Standard reported.

As it plans to shut down these business verticals in India, the company is looking to focus on its core businesses.

The distribution segment was operational in three cities of Karnataka —Bengaluru, Mysore and Hubli. While 50 employees worked in the Amazon Distribution project, the ecommerce giant is looking to find alternative roles for them within the organisation.

“We are discontinuing this programme in a phased manner to take care of current customers and partners and we are supporting our affected employees during this transition,” an Amazon spokesperson said as quoted in the report.

Amazon Distribution is a members-only app and website designed for catering to kiranas, department stores, pharmacies and other resellers. It is operated by Amazon Wholesale (India).

Amazon is also winding up its food delivery business by the end of the year. In a communication sent by the US-based company to its restaurant partners, Amazon said that it plans to discontinue Amazon Foods from Dec 29, 2022. The food delivery vertical was operational only on a pilot basis in Bengaluru city.

Earlier this month, the ecommerce major also said that it was shutting down its edtech vertical, Amazon Academy. It will wind down the edtech service in the country in a phased manner starting August 2023.

Amid its ongoing cost-cutting exercise, Amazon recently decided to cut 10,000 jobs in corporate and technology verticals globally. With India accounting for about 7% of the company’s total headcount of more than 1.5 Mn, the layoffs exercise is expected to impact hundreds of its employees in the country.

It is to be noted that the Labour Ministry summoned executives of the ecommerce giant in Bengaluru last week following a complaint by employee union Nascent Information Technology Employees Senate (NITES) on layoffs by Amazon in India.

In a meeting with the labour ministry, Amazon India maintained that it has not fired a single employee in India yet.

However, Amazon India employees are being asked to resign voluntarily, Inc42 reported citing sources. The sources added that such voluntary resignations within Amazon would continue unabated over the next two to three months as several Amazon verticals have been impacted.

For the ecommerce giant, India remains a key market for its business. Amazon narrowed its loss by 23% to INR 3,649.2 Cr in FY22 from INR 4,748.1 Cr in FY21 in India. The ecommerce major reported an over 32% increase in its operating revenue to INR 21,462 Cr in FY22 from INR 16,200.3 Cr in FY21.

Note: We at Inc42 take our ethics very seriously. More information about it can be found here.