2023-02-19

Amazon Shut-Down

By: Anika Vadala

Amazon India has declared that it is shutting down Amazon Food, Amazon Academy and Amazon Distribution in India. Wholesale distribution was established well before the pandemic, while the food delivery business started in 2020 and the ed-tech was launched in 2021. Amazon has closed down these Indian branches as a response to its declining demand. The estimate of $148 billion is much lower than the expected $150 billion from analysts, highlighting the slowdown.

Amazon faces competition from Reliance Industries, Tata Group and Flipkart. In the food industry Amazon can not compete with Swiggy and Zomato. Amazon will sack upto 1000 employees, which is 1% of its workforce in India. The e-commerce giant also offered the Voluntary Separation Program (VSP) in which employees can resign to receive a fair severance package.

The current condition of Amazon is a serious predicament for Andy Jassy, Amazon's new CEO. Within a few months under his control, Amazon is experiencing angry shareholders, disgruntled employees, negative press, layoffs, rising costs, and several other troubles. Amazon has been having issues in India since the start of 2022. It butted heads with Reliance multiple times, losing rights to broadcast the IPL, to acquire Metro Cash & Carry and Future Retail. Though the termination of the food delivery might not be considered a major hindrance, the departure from wholesale distribution is significant.