After food services, Amazon shuts down wholesale distribution business in India

After food services, Amazon shuts down wholesale distribution business in India
After food services, Amazon shuts down wholesale distribution business in India

Amazon is shutting down its wholesale distribution business in India as a part of the annual operating planning review process and cost-cutting measures. The distribution vertical is operated in three cities– Bengaluru, Mysuru, and Hubli. It deals in buying fast consumable products from businesses and distributes them in wholesale directly to local shops like kirana stores, pharmacies, and department stores to support their small business.

The U.S -based tech giant is currently working on cost-cutting measures amid the economic slowdown. After the mass layoff, the company decided to cost-cutting around its global business amid the economic slowdown. In one of the media statements, Amazon confirmed that the company will discontinue Amazon Distribution, their wholesale e-commerce division, as part of the annual operating planning review process. The service will no longer operate from December 29, 2022.

Significantly, it’s the third business the company has closed in India. Earlier, the company announced to discontinue of its food delivery service- Amazon Food, and its ed-tech venture- Amazon academy. The Amazon food delivery service was started in 2020 as a pilot project based in Bengaluru. The service will now stop from December 29. Meanwhile, the company will discontinue its ed-tech segment- Amazon Academy, from August 2023. Amazon started the Amazon Academy as an online learning platform for engineering students to prepare for competitive exams like the JEE.

Meanwhile, the company recently laid off around 10,000 employees from its global workforce. Company CEO Andy Jassy in his official statement confirmed the layoffs and announced that the firings will continue in the coming months of 2023. However, all the employees are not fired directly. The company has asked its employees to switch teams within a few weeks or has asked them to voluntarily resign by signing up for the Voluntary Separation Program (VSP)

Under the VSP, the employees will be getting 22 weeks of Base Pay, one-week base salary for every six months of service (rounded to the nearest 6 months), up to twenty weeks’ paid severance. Along with that the employees will also get medical Insurance coverage for 6 months under the Insurance Benefit policy or an equivalent insurance premium amount in lieu. However, if the employees are under performance improvement programs (PIP) they will not be able to sign up for VSP.


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