Amazon Fresh lays off in-store managers amid grocery restructuring

Less than a week after closing three of its stores in the U.K., Amazon Fresh laid off hundreds of its U.S. workers amid a large-scale grocery restructuring, according to published reports and the retailer.

On Wednesday, Amazon eliminated all of its so-called "zone leads," managers who perform a variety of duties, including stocking shelves, training employees, posting job listings, assisting customers and managing inventory, according to an initial report in The Washington Post. 

It is unclear exactly how many employees lost their jobs, but Amazon confirmed via email to WGB that the layoffs are a move to restructure the staffing and operations at its 44 U.S. Amazon Fresh locations.  

“Like any retailer, we periodically assess our stores’ organizational needs and make decisions to increase efficiencies for our employees and deliver customer value,” Amazon spokesperson Jessica Martin said. “As a result, we’ve decided to evolve our in-store staffing and operations model to better serve our customers and teams. We remain committed to our grocery business, and we’re working closely with affected employees to help them find new shifts or roles within Amazon.” 

Amazon said it is working with employees to identify new roles for them within the company, and those who do not find another position will be given severance pay. Amazon zone leads who do not stay with the company received 60 days' pay upon their departure, the Post reported.  

Amazon also said it will continue to invest in its stores.

The company confirmed the layoffs did not extend to its other grocery chain, Whole Foods Market. However, Amazon also restructured the organic grocery store chain in April, eliminating hundreds of corporate-level positions and consolidating its internal organizational structure from six to nine regions.  

Amazon reemphasized comments from Amazon CEO Andy Jassy in April, when he told investors that the company still sees big opportunities for the business. “Whole Foods is on an encouraging path, but to have a larger impact on physical grocery, we must find a mass grocery format that we believe is worth expanding broadly,” Jassy wrote in an investor letter. “Amazon Fresh is the brand we’ve been experimenting with for a few years, and we’re working hard to identify and build the right mass grocery format for Amazon scale. Grocery is a big growth opportunity for Amazon.” 

Meanwhile, the company, which planned to open at least a dozen new Amazon Fresh stores across the U.S., faces at least two lawsuits—one in Washington state and another in Pennsylvania—over its decision to leave newly built Amazon Fresh stores unopened.  

Last year, the company built Amazon Fresh locations in cities across the U.S., installed Amazon Fresh signs on the buildings and then stalled. Half a dozen of the locations are in the Minneapolis-St. Paul metro area, and in May, were put up for sublease in the Twin Cities. 

Despite the recent closures in the U.K. and the never-opened stores in the U.S., the company said sales are up at brick-and-mortar stores, noting year-over-year growth of 7% in the first quarter of 2023.  

Amazon Fresh opened its first store in September 2020 and currently operates more than 60 locations in the U.S. and U.K.