Closed businesses, layoffs, and more: What's the future for Amazon India?

With the closing of Amazon Distribution, the e-commerce giant has decided to shut its third business in India within a week. Earlier, the company had announced it would close down the edtech platform Amazon Academy and the food delivery service Amazon Food. The closure will also lead to job cuts in the “low hundreds” out of the e-commerce firm’s thousands of employees in India, as per Bloomberg. Earlier in the month, Amazon had announced it would lay off employees, the number of which would be 10,000, according to the New York Times. Meanwhile, Hindustan Times has reported that the labour ministry will set up an inquiry to find out whether these layoffs violate India’s labour laws or terms of service. Why is Amazon shutting down businesses in India? Why the Indian government will launch a probe? We explain. Amazon India shelves 3 businesses  Amazon has decided to close Amazon Distribution which operates in Bengaluru, Hubli and Mysore in Karnataka, according to News18 report. “As part of our annual operating planning review process, we have made the decision to discontinue Amazon Distribution, our wholesale e-commerce website for small neighbourhood stores around Bengaluru, Mysore and Hubli," the company said in a statement, as per the report. The retail giant has said it would close Amazon Distribution in a phased manner to cater to existing customers and partners. It has also assured to support the employees who would be affected due to this, reported News18.  [caption id=“attachment_11718931” align=“alignnone” width=“640”] Amazon had announced layoffs earlier. AP (Representational Image)[/caption] Amazon also said in its statement that the company “continually evaluates the progress and potential of products and services to deliver customer value and makes adjustments based on those assessments”, as per Moneycontrol.

On 24 November, Amazon had announced the closure of its edtech arm.

The next day it said it would wrap up the operations of Amazon Academy. Launched in early 2021, the online education platform offered test preparation material to students to help them get into medical and engineering schools, as per Bloomberg. “Amazon will discontinue Amazon Academy’s operations in a phased manner, starting August 2023, when our existing batch completes its test preparation module. We remain committed to our customers and want to assure them that this decision will have no impact on our services,” the company had said in a statement last week, Moneycontrol reported. On 25 November, Amazon decided to put up the shutters on its food delivery service, which it had launched in May 2020. According to Moneycontrol, the company told its restaurant partners it has decided to close Amazon Food in India from 29 December. “This decision means that you will no longer get orders from customers via Amazon Food after this date. You will continue to receive orders till then and we expect you to continue fulfilling those orders,” a mail by Amazon to its restaurant partners read, according to Moneycontrol. These announcements come in the wake of Amazon Chief Executive Officer (CEO) Andy Jassy warning employees that “there will be more role reductions as leaders continue to make adjustments”, Forbes reported on 18 November. [caption id=“attachment_11718921” align=“alignnone” width=“640”] Amazon CEO Andy Jassy had warned employees of ‘role reductions’. Image Courtesy: Amazon[/caption] In the corporatewide memo, Jassy said the managers would assess and monitor “workforce levels” to decide who will continue or be let go for the “long-term health” of the company, Forbes added. ALSO READ: Amazon’s Alexa team set to lose $10 billion this year, was the main driving force behind mass layoff India to ’launch probe’ Hundreds of employees will be affected in India due to Jassy’s cost-reduction campaign amid the slowing growth in many areas of the retail giant’s business, says Bloomberg. The move has invoked the wrath of Nascent Information Technology Employees’ Senate (NITES), a collective of IT professionals with more than 18,000 members. As per Hindustan Times, NITES complained about the “mass layoffs” to Union labour minister Bhupender Yadav, following which a notice was sent to Amazon India last week. In its response, Amazon India claimed employees have not been sacked but some had resigned accepting the company’s Voluntary Separation Program (VSP). Harpreet Singh Saluja, president of NITES, has alleged that these workers were told that those who would not opt for the VSP would be “retrenched without any benefits” under a “workforce optimisation programme”, as per Hindustan Times report. According to India Today, employees who resigned voluntarily would get 22 weeks of base pay, one-week base salary for every six months of service and severance pay. Moreover, they would also be eligible for a six-month medical insurance coverage or an equivalent insurance premium amount in lieu.

The ministry will now investigate if the layoffs by Amazon India violate labour laws.

The employees who chose the voluntary exit scheme will also be contacted by the ministry to verify the e-commerce firm’s claims, the report said. “In its response (to the labour ministry), the company said that they had expected to make more money through their business, but owing to financial expedience, they floated a voluntary exit programme. They said there were no forced layoffs. However, we will be examining whether the exits were voluntary and if the terms of services, which includes severance and notice period, were adhered to,” a ministry official told Hindustan Times on the condition of anonymity. With inputs from agencies Read all the  Latest News ,  Trending News ,  Cricket News ,  Bollywood News , India News  and  Entertainment News  here. Follow us on  Facebook,  Twitter and  Instagram.