The $3.9b acquisition just two years ago suddenly looks on shaky ground as a leaked email shows Amazon is tugging on its healthcare business’s leash.
An internal email from Amazon’s One Medical CEO reveals a corporate downsize of its healthcare subsidiary.
The cost cuts include laying off “a few hundred” employees across One Medical and Amazon Pharmacy, and the closure of corporate offices in New York, Minneapolis and St. Petersburg, according to the email, from One Medical’s chief executive Trent Green.
The email, obtained by Business Insider, said office closures are planned to occur by the end of this month. A One Medical office in San Francisco will remain but be downsized to just one floor. However, regional offices will expand from four to seven core regions.
The healthcare division cuts are just the latest in widespread job losses across many business units. Last year the company cut jobs at Audible, Prime Video, Twitch, and Buy with Prime divisions with total job losses of around 27,000, between 2022 and 2023, according to Seeking Alpha, a USA investor publication
The news comes only three months after One Medical advertised its services to Amazon Prime customers and less than two years since Amazon bought One Medical for a hefty $3.9 billion – the third largest amount Amazon had ever spent on an acquisition.
Following the leaked email, Neil Lindsay, head of Amazon’s healthcare business wrote to internal staff reassuring them that the healthcare business has seen steady growth across its Pharmacy, One Medical, and Clinic segments but there were areas where it could “reposition resources” to invest in “invention and experiences that have a direct impact” on end users.
Mr Lindsey will get at least one new team member out of the restructure. Bjorn Thaler, One Medical’s head of finance, will transfer to a new role, reporting directly to the Amazon healthcare boss.
The role will focus on “strategic growth initiatives” with Thaler focusing on “identifying healthcare trends” and spearheading new projects that will lower costs and improve services.
Amazon has been pressuring One Medical tighten its belt since acquisition, according to Business Insider. This restructure will see One Medical executives across finance, legal and technology all now reporting to their big brother, Amazon healthcare business.
