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Amazon cuts hundreds of jobs in Pharmacy, One Medical units: Read memo

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Amazon has eliminated hundreds of jobs in its Pharmacy and One Medical divisions, the company confirmed to CNBC.

“As we continue to make it easier for people to get and stay healthy, we have identified areas where we can reposition resources so we can invest in invention and experiences that have a direct impact on our customers and members of all ages,” Neil Lindsay, who leads Amazon Health Services, wrote in a memo to employees on Tuesday. “Unfortunately, these changes will result in the elimination of a few hundred roles across One Medical and Amazon Pharmacy.”

Business Insider reported earlier on the cuts, which Lindsay said preempted the company’s planned announcement.

Amazon continues to trim its headcount after more than a year of layoffs. The company cut more than 27,000 jobs between late 2022 and mid-2023, as the tech industry downsized alongside soaring inflation and rising interest rates. At the start of this year, Amazon announced cuts in its Prime Video, MGM Studios, Buy with Prime, Twitch and Audible units.

CEO Andy Jassy has been aggressively slashing costs, targeting some of the company’s newer and more unproven bets. A small number of employees were let go in Amazon’s Pharmacy unit last July.

Amazon Chief Financial Officer Brian Olsavsky said on a call with reporters following fourth-quarter earnings last week that the company is still being cautious about headcount expansion. “Where we can find efficiencies and do more with less, we’re going to do that as well,” he said.

Amazon acquired One Medical for roughly $3.9 billion in July 2022, the third-biggest deal in its history, as part of a multiyear effort to grow its presence in health care. In addition to acquiring One Medical, it bought PillPack in 2018 as an entry point into the online pharmacy market, and has launched a virtual health clinic service.

In a separate statement Tuesday, Lindsay said Amazon has seen “very strong momentum and positive customer feedback” across its health-care offerings, and that it will continue to invest in them.

Here’s the full memo from Lindsay:

Hi everyone, 

The past year has been incredibly exciting for all of our health care businesses, and we’re seeing tremendous growth for Amazon Pharmacy, One Medical, and Amazon Clinic. We reinvented the Amazon Pharmacy experience throughout 2023 to make it more affordable and convenient for customers to get the prescription medications they need through RxPass, automatic coupons, partnerships, and more. We expanded Amazon Clinic nationwide, and since launch, the marketplace has seen a 96% customer satisfaction rating. And, One Medical continues to grow its membership, benefiting from increased awareness from Amazon, such as the new Prime member benefit, while also focusing on ways to continually improve the care experience for members across One Medical and One Medical Seniors. We remain energized to learn from One Medical’s DNA and scale mechanisms like CI-CARE, alongside Amazon’s Leadership Principles. 

As we continue to make it easier for people to get and stay healthy, we have identified areas where we can reposition resources so we can invest in invention and experiences that have a direct impact on our customers and members of all ages. Unfortunately, these changes will result in the elimination of a few hundred roles across One Medical and Amazon Pharmacy.

We are aware these role eliminations are difficult for those impacted, as well as those who have worked alongside them. We will support those who are affected with financial support, benefit continuation, and career assistance to aid in their transition, as well as the opportunity to apply for new roles in the organization.

We typically wait to communicate about these outcomes until we can speak with the people who are directly impacted. However, because one of our teammates leaked this information externally, I wanted you to hear the details directly from me. This is not ideal, and I am sorry if you heard about this externally first. We will communicate with impacted employees tomorrow.

Please know that my leadership team and I will provide guidance on the path forward following these changes. I look forward to working with you to continue helping our customers and members alike get and stay healthy.

Neil

CNBC is now accepting nominations for the 2024 Disruptor 50 list, our annual look at private companies using breakthrough technology to transform industries. Submit your nomination by Friday, Feb. 16., to d50nominations.cnbc.com.

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