Amazon reportedly to cut hundreds of healthcare jobs

Amazon is reportedly cutting over 100 jobs at One Medical and Amazon Pharmacy, according to a letter to employees from Amazon Healthcare Services executive Neil Lindsay.

Roughly 115 positions may be eliminated within the healthcare division, according to Business Insider, in a move to decrease One Medical operating losses. Seeking Alpha reported that the job cuts could amount to several hundred as part of a company-wide effort to save $100 million this year.

One Medical aims to cut its fixed operating costs from 41% to 20% of total revenue by 2028, the Insider report said, adding that the company also plans to reduce the cost of each patient’s visit to $322 in 2024, from $372 in 2023.

In an email to employees, Amazon Health Services Senior Vice President confirmed the elimination of “a few hundred roles” within Amazon Pharmacy and One Medical. The company was also realigning One Medical’s Finance, Legal and Tech teams into AHS, he said. 

“We’re seeing very strong momentum and positive customer feedback across our healthcare offerings. As we continue our mission to make healthcare simpler for customers, we’re realigning some resources to help accelerate our efforts to deliver the best experience for our patients, customers, and members. Unfortunately, these adjustments will result in the elimination of a few hundred roles within Amazon Pharmacy and One Medical. We’re grateful to these team members for their contributions, and we will support them in their next steps. We will continue hiring providers and investing in teams and technology that will help us provide high-quality and accessible care to more people.”

WHY THIS MATTERS

Amazon acquired One Medical last year with the announcement of the acquisition in July 2022. The deal was valued at $3.9 billion. Amazon had agreed to acquire One Medical in July 2022.

One Medical is a membership-based primary care organization that offers virtual care as well as in-person visits. 

The deal was another example of a company outside of traditional healthcare provided by hospitals and physician practices making inroads into the primary care market.

While the retailization of healthcare is seen as a competitive threat to traditional hospital and physician services, these deals have not always run smoothly. Experts have said there is a learning curve to healthcare and its low operating margins. 

THE LARGER TREND

The job cuts to the healthcare division are just the latest to impact Amazon’s business units, according to the Seeking Alpha report. Last year the company cut jobs at Audible, Prime Video, Twitch and Buy with Prime divisions.

Amazon recently announced better-than-expected fourth quarter results and set upbeat guidance for Q1 2024. 

Email the writer: SMorse@himss.org