Amazon Inc will shut its food-delivery business in India from December 29, the Economic Times reported on Friday, citing a communication by the company to its restaurant partners.
Amazon India did not immediately respond to a Reuters request for comment.
With the threat of a global slowdown looming, the Seattle-based company, which has been cutting costs in various areas of its business in the past few months, is undergoing an annual review process to figure out where it can save more money. Amazon CEO Andy Jassy said this year's review is "more difficult" due to the economic landscape and the company's rapid hiring in the last several years.
Other tech companies, many of which had gone on hiring binges in the past few years, have also been trimming their workforce amid concerns about an economic slowdown. Among others, Facebook parent Meta said last week it would lay off 11,000 people, about 13 percent of its workforce. And Elon Musk, the new Twitter CEO, has slashed the company's workforce in half this month.
Amazon has told its restaurant partners in India that it has decided to discontinue its food delivery service, which it had started in May 2020, from December 29. This comes a day after the e-commerce major shut down its fledgling edtech arm in the country, even as the company plans to lay off thousands of employees globally.
“This decision means that you will no longer get orders from customers via Amazon Food after this date. You will continue to receive orders till then and we expect you to continue fulfilling those orders,” said a mail by Amazon to restaurant partners,
The company has told restaurants that is committed to meet all its payments and other contractual obligations. Restaurants will have access to all Amazon tools and reports till January 31, 2023. It will also provide support till Mar 31 for any compliance related issues.
"As part of our annual operating planning review process, we have made the decision to discontinue Amazon Food, our pilot food delivery business in Bengaluru," Amazon said regarding the shut down.
"We don’t take these decisions lightly. We are discontinuing these programs in a phased manner to take care of current customers and partners and we are supporting our affected employees during this transition," it added.
The company said that it remains committed to the India market and will continue to invest across grocery, smartphones and consumer electronics, fashion & beauty, as well as B2B offerings such as Amazon Business.
Customers have been telling us for some time that they would like to order prepared meals on Amazon in addition to shopping for all other essentials. This is particularly relevant in present times as they stay home safe,” the company said at the time of Food launch.
India’s food delivery market is estimated to be worth $20 billion in three years, according to Sanford C. Bernstein. Zomato, publicly listed, currently maintains a small lead in the market against rival Swiggy, backed by SoftBank, Prosus Ventures and Invesco.
Amazon said Friday: “We don’t take these decisions lightly. We are discontinuing these programs in a phased manner to take care of current customers and partners and we are supporting our affected employees during this transition. Amazon remains focused on providing our growing customer base the best online shopping experience with the largest selection of products at great value and convenience.”
The announcement is part of Amazon’s broader restructuring in India. It announced earlier this week that it will be shutting down its edtech service Academy in the country next year.
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