Amazon Flex driver Ricardo Escalona works to deliver his orders the same day during Cyber Monday on Nov. 27, 2023, from an Amazon fulfillment center in Tampa, Florida.
Octavio Jones | Getty Images News | Getty Images
Amazon is shutting down a service that offers same-day deliveries from malls and brick-and-mortar retailers, CNBC has learned.
The company has stopped any new development of the service, called Amazon Today, and will begin phasing it out, according to two people familiar with the matter. The people asked not to be identified because they were not authorized to speak to the press.
Most of the program will be shut down by Dec. 2, the people said. Select retail partners can continue to fulfill orders on Amazon Today through January 24, 2025, Amazon told CNBC.
A small number of employees will be laid off and given severance pay, while others will be moved to other positions within Amazon, the company said.
Employees who work at Amazon Today learned the news in a meeting Monday, where some employees were told they would be laid off, the people said. According to the information, around 300 employees worked at Amazon Today. Amazon disputed the figure, saying the unit employed about 175 people.
Amazon Today's closure is the latest example of the company's broader cost-cutting efforts.
Since 2022, Amazon CEO Andy Jassy has been leading a cost-cutting campaign across the company to meet rapidly changing macro conditions. From 2022 to 2024, Amazon initiated the largest layoffs in its history, eliminating more than 27,000 jobs. Jassy has taken a tougher stance on the company's unproven and costlier bets than his predecessor, Amazon founder Jeff Bezos. Jassy has dropped several projects, including a telehealth service, a video calling device for children and a moving treasure wagon.
Launched in 2022, Amazon Today enables retailers selling on Amazon to receive fast delivery from their brick-and-mortar stores and malls in select cities. Amazon's contracted Flex drivers, who make deliveries using their own vehicles, pick up packages and drop them off at customers' doorsteps within hours of ordering.
Amazon Today was part of the company's efforts to bring online purchases to shoppers' doorsteps faster. Amazon continues to add more facilities focused on same-day deliveries to boost sales and compete with other companies that offer ultra-fast deliveries. These include Instacart and DoorDash, which have expanded beyond groceries and grocery into retail.
According to the program's website, the company had signed up several retailers for Amazon Today. That list included Office Depot; staples; Petco; PacSun; vitamin and supplement chain GNC; and Fabletics, actress Kate Hudson's sportswear brand.
Amazon is working with the retailers it has signed up for the service to ensure they have a smooth transition, the company said. Amazon added that it continues to value and invest in fast delivery.
The decision to close Amazon Today comes as a surprise because Amazon is in the process of integrating other retailers, one of the people said. The company introduced the service to other retailers at a conference last week.
The service is more expensive than traditional delivery routes that allow Flex drivers to fill their cars with packages from an Amazon warehouse, one of the respondents said. Amazon Today's routes, which the company calls “retail deliveries,” typically didn't fill a driver's trunk, making the program less worthwhile for Flex contractors.
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