Amazon is undergoing significant restructuring in India, resulting in employee layoffs across various departments and functions, including Amazon Web Services (AWS), human resources, and support functions.
Sources reveal that at least 500 employees in India have been affected by these layoffs, which are part of the broader job cuts announced by Amazon CEO Andy Jassy in March, impacting approximately 9,000 employees worldwide.
The decision to downsize operations in India is seen as a response to the challenging market conditions and a shift in Amazon’s global strategy.
The company had already hinted at job cuts in India as part of its broader restructuring plans announced in November of the previous year.
The move follows the closure of several business divisions in India, such as edtech, food delivery, and wholesale distribution, signaling Amazon’s focus on streamlining its operations and optimizing its presence in the country.
Additionally, the closure of seller onboarding functions in tier-2 cities like Kochi and Lucknow underscores Amazon’s efforts to rationalize its operations and concentrate resources on more lucrative areas. By consolidating its seller onboarding processes, Amazon aims to enhance efficiency and better align its services with market demands.
The layoffs in India also reflect the challenges faced by Amazon’s cloud computing division, AWS. During an analyst briefing in April, Amazon’s CFO, Brian Olsavsky, acknowledged that the growth of AWS would likely slow down due to business customers adopting a cautious approach and reducing their spending.
This cautionary stance by AWS customers, coupled with the broader market volatility, has prompted Amazon to realign its cloud business strategy and take necessary cost-cutting measures.
As the Indian market continues to evolve and face challenges, including increased competition and regulatory changes, it is crucial for Amazon to stay agile and align its operations with market conditions.
The company’s restructuring efforts, though disruptive in the short term, reflect its commitment to long-term growth and sustainability in one of the world’s fastest-growing economies.
Job Cuts at Amazon India
It remains to be seen how Amazon’s repositioning in India will impact its overall growth trajectory and competitive standing in the region.
However, by adapting to market challenges and refining its operations, Amazon aims to maintain its position as a key player in the Indian e-commerce and cloud computing sectors while capitalizing on future growth opportunities.
Amazon’s ecommerce business in India is experiencing a slowdown and the growth of online shopping across various ecommerce platforms, including Amazon, has been slower than expected. Among the leading ecommerce platforms in India, Amazon seems to be the most affected.
The slowdown in Amazon’s ecommerce business in India is partly due to ongoing regulatory compliance issues. To adhere to Indian regulations, Appario, one of Amazon’s significant sellers, is presently in the process of shifting its inventory to different sellers.
These regulations prevent foreign-owned entities operating online marketplaces, like Amazon, and their affiliated companies from owning stakes in sellers on the platform or exerting control over their inventory.
To navigate these regulations, Amazon had formed a joint venture with the Patni group to establish Appario.
However, this is not the first time a major seller firm in which Amazon had a stake has been forced to cease operations due to regulatory changes in India. In 2019, Amazon had reduced its stake in Prione, the parent company of Cloudtail, to 24%.
However, last year, Amazon acquired 100% ownership by purchasing Catamaran Ventures’ stake in Prione. As a result, Cloudtail had to withdraw from Amazon India. Catamaran Ventures serves as the investment division associated with N R Narayana Murthy, the renowned founder of Infosys.
These regulatory challenges and changes have created a transition period for Amazon’s ecommerce business in India. The company is adjusting its operations and partnerships to comply with the regulations while aiming to sustain its presence and market share.
These developments highlight the complexities and compliance requirements faced by foreign ecommerce companies operating in India’s dynamic and evolving market.
