Amazon is cutting hundreds of jobs in a medical and pharmacy division

Amazon is cutting hundreds of jobs in a medical and pharmacy division

Amazon’s healthcare units, including One Medical and Amazon Pharmacy, are making new cuts as part of a broader cost-cutting campaign, Business Insider has learned.

An Amazon spokesperson confirmed to BI in an email that the cuts will affect “several hundred roles.”

About 115 positions could be eliminated, one person said. Up to 400 more workers could lose their jobs. The company had planned to announce the layoffs before February 1, but postponed it due to Amazon’s recent earnings report and other internal issues.

The plan is part of a companywide mandate to reduce One Medical’s fixed cost structure, these people said. Amazon management wants One Medical to significantly reduce its operating losses and has asked the healthcare company to save an additional $100 million this year, one of the people said. There was a Medicine $420 million operating loss It reported financial results in 2022, before being acquired by Amazon last year.

Amazon started the year with job cuts across a number of divisions, including Twitch. Prime Video, It sounds, and Amazon Pay. It still is increased anxiety More job cuts at Amazon like CFO Brian Olsavsky last week declined to say whether the cuts were over during a conversation with journalists.

Neil Lindsay, Amazon’s Senior Vice President of Amazon Health Services, confirmed the layoffs in an email to BI.

“We are seeing very strong momentum and positive customer feedback across our healthcare services. As we continue our mission to simplify healthcare for customers, we are realigning some resources to help accelerate our efforts to deliver the best experience for our patients, customers and members,” Lindsay said in a statement.

“Unfortunately, these adjustments will result in the elimination of several hundred roles at Amazon Pharmacy and One Medical. We are grateful to these team members for their contributions and will support them in their next steps. We will continue to hire providers and provide high-quality, accessible care to more people.” investing in teams and technology to help us deliver,” he added.

More control over One Medical

One Medical is one of Amazon’s mega acquisitions during the pandemic-driven boom. Amazon bought MGM for $8.5 billion in 2021, then announced plans to buy both One Medical and Roomba maker iRobot in 2022.

Covid-related growth has not taken off as expected, and Amazon has responded by aggressively cutting costs. It has laid off at least 27,000 workers over the past 18 months and crippled a number of long-term projects. The recent iRobot deal as well passed due to regulatory issues.

Cost reduction projections

One Medical plans to combine marketing resources with Amazon’s own healthcare business, the people said. One Medical also wants to integrate corporate functions across real estate, compliance, finance and HR while centralizing support roles. The new AI tools are expected to boost productivity and save costs, according to one of the people familiar with the situation.

A medical office

A Medical office

A Medical

Under this plan, One Medical predicts that fixed operating costs will fall from 41% of total revenue to just 20% by 2028. The company also aims to reduce the cost of each patient visit from $372 in 2023 to $322 in 2024. This will be done mainly by increasing the number of patients served, one of the people said. Amazon recently came out the new One Medical discount option For senior members.

Amazon has more control over One Medical after it closes on the $3.9 billion acquisition in early 2023, according to three current employees. Tensions between Amazon and One Medical’s leadership team have grown in recent months, and some One Medical executives are expected to leave the company as part of the shakeup, one of the people said. One Medical’s former CEO, Amir Dan Rubin, resigned late last year.

In December, One Medical changed its compensation plan to more closely track Amazon, causing internal tensions. BI had informed earlier.

Many people are not convinced that Amazon will support One Medical’s corporate DNA, one of the people told BI.

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