The closures affect 68 stores across the U.S. and U.K., Amazon said. Closure dates will vary by location and Amazon said it would help affected employees find roles elsewhere in the company. Workers who opt not to stay will be offered severance packages, it said.
Amazon has gradually launched an array of brick-and-mortar concepts, from supermarkets to retail stores offering branded electronics like Fire tablets and Echo smart speakers. The 4-star stores, in particular, attempted to mesh Amazon’s in-store and offline operations by featuring top-selling products in its web store.
But sales growth of the physical stores unit has noticeably lagged the company’s overall retail business. Physical stores, which includes Whole Foods and Fresh outlets, reported lower sales in 2021 than in 2018.
Amazon is trimming its physical retail footprint after coming off its slowest growth rate for any quarter since 2001. Shares are down more than 8% so far this year, and the stock was the worst performer in the Big Tech group last year.
Amazon has also introduced other experimental retail technologies like Amazon One, which lets users scan the palm of their hands to pay for items, and Dash Carts, a shopping cart filled with sensors that let shoppers check out without a cashier.
The physical stores unit is currently overseen by Dilip Kumar, a former “shadow” of Amazon founder Jeff Bezos.
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