Amazon to shut down speedy brick-and-mortar delivery service
Amazon Flex driver Ricardo Escalona works to deliver his same-day orders during Cyber Monday from an Amazon fulfillment center in Tampa, Florida, on Nov. 27, 2023.
Octavio Jones | Getty Images News | Getty Images
Amazon is shutting down a service that offers same-day delivery from mall and brick-and-mortar retailers, CNBC has learned.
The company has stopped any new development of the service, called Amazon Today, and will begin to wind it down, according to two people with knowledge of the matter. The people asked not to be named because they were not authorized to speak to the press.
The bulk of the program will be shut down by Dec. 2, the people said. Select retail partners will be able to continue fulfilling orders with Amazon Today through Jan. 24, 2025, Amazon told CNBC.
A small amount of employees will be laid off and provided with severance, while others will be transitioned to other positions within Amazon, the company said.
Employees who work on Amazon Today learned the news in a meeting on Monday, where some staffers were informed they would be laid off, the people said. Roughly 300 employees were working on Amazon Today, the people said.
The closure of Amazon Today is the latest example of the company’s broader cost-cutting efforts.
Since 2022, Amazon CEO Andy Jassy has been on a campaign to cut costs across the company in order to meet rapidly changing macro conditions. Beginning in 2022 and extending through 2024, Amazon initiated the largest layoffs in its history, cutting more than 27,000 jobs. Jassy has taken a harder line on the company’s unproven, costlier bets than his predecessor, Amazon founder Jeff Bezos. Jassy has axed several projects, including a telehealth service, video-calling device for kids and a roving Treasure Truck.
Launched in 2022, Amazon Today allows retailers who sell on Amazon to offer speedy delivery from their brick-and-mortar stores and shopping malls in select cities. Amazon’s contracted Flex drivers, which make deliveries using their own vehicles, fetch the packages and drop them at customers’ doorsteps within hours of when the orders were placed.
Amazon Today was part of the company’s push to get online purchases to shoppers’ doorsteps at faster speeds. Amazon continues to add more facilities focused on same-day deliveries in a bid to boost sales and compete with other companies that provide ultrafast delivery. That includes Instacart and DoorDash, which have expanded beyond food and groceries and into retail.
The company had signed up several retailers to Amazon Today, according to the program’s website. That list included Office Depot; Staples; Petco; PacSun; vitamin and dietary supplement chain GNC; and Fabletics, the athletic-wear brand owned by actress Kate Hudson.
Amazon is working with the retailers it signed up for the service to ensure a smooth transition for them, the company said. Amazon added that it continues to prioritize and invest in fast delivery.
The decision to shutter Amazon Today comes as a surprise since Amazon was in the process of onboarding other retailers, one of the people said. The company was also pitching the service to more retailers at a conference last week.
The service skewed more costly than traditional delivery routes where Flex drivers can fill their cars up with packages from an Amazon warehouse, one of the people said. Amazon Today routes, which the company calls “retail deliveries,” did not usually fill up a driver’s trunk, making the program less worthwhile for the Flex contractors.
Airbnb CEO Brian Chesky said he wants to integrate ChatGPT artificial intelligence capabilities into the travel platform but the software isn’t ready.
“The [software development kit] wasn’t quite robust enough for the things we want to do,” he told CNBC’s “Squawk Box” on Wednesday.
Chesky said the company would “probably” want to integrate ChatGPT eventually.
Airbnb on Tuesday launched a series of new social features, such as direct messaging, to its platform. The update also included a personalized version of the company’s chatbot launched earlier this year that can cancel and change reservations for users in North America.
In an interview with Bloomberg this week, Chesky said that the OpenAI chatbot isn’t “quite ready” for integration with Airbnb. He said the model was made using 13 different chatbots and that Airbnb is depending heavily on Alibaba’s Qwen model.
Chesky, who is a close friend of OpenAI CEO Sam Altman, said it’s only the beginning of the AI revolution and he expects the technology to fuel a consumer app craze over the next few years.
“We’re all going to have to work together,” he said. “AI is going to lift up a lot of companies. If they want to vertically integrate every single thing, that’s going to be very, very difficult.”
OpenAI did not immediately respond to a request for comment.
Mark Zuckerberg, CEO of Meta Platforms.
David Paul Morris | Bloomberg | Getty Images
Meta will lay off roughly 600 employees within its artificial intelligence unit as the company looks to reduce layers and operate more nimbly, a spokesperson confirmed to CNBC on Wednesday.
The company announced the cuts in a memo from its Chief AI Officer Alexandr Wang, who was hired in June as part of Meta’s $14.3 billion investment in Scale AI. Workers across Meta’s AI infrastructure units, Fundamental Artificial Intelligence Research unit and other product-related positions will be impacted.
Axios was first to report the cuts.
Meta has been aggressively investing in AI as it works to keep pace with rivals like OpenAI and Google, pouring billions of dollars into infrastructure projects and recruitment.
On Tuesday, the company announced a $27 billion deal with Blue Owl Capital to fund and develop its massive Hyperion data center in rural Louisiana. The data center is expected to be large enough to cover a “significant part of the footprint of Manhattan,” Meta CEO Mark Zuckerberg said in a post in July.
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