Home Markets Amazon’s drone unit has been hit with layoffs as the long-awaited program is launched

Amazon’s drone unit has been hit with layoffs as the long-awaited program is launched

by SuperiorInvest

Amazon Prime Air drone

Source: Amazon

In 2013, Amazon founder Jeff Bezos appeared on CBS’s “60 Minutes”. reveal a futuristic plan his company was secretly implementing to deliver packages by drone in 30 minutes.

A pre-recorded demo showed an Amazon-branded “octocopter” carrying a small package from a conveyor belt and into the sky to a customer’s home, landing smoothly in a backyard, dropping the item, then flying away. Bezos predicted that a fleet of Amazon drones could take off within five years, saying, “It’s going to be a lot of fun.”

Ten years later, Amazon is finally starting to launch drone deliveries in two small markets through a program called Prime Air. But just as the drone program is finally getting off the ground, it’s hitting a struggling economy and CEO Andy Jassy cost reduction efforts.

CNBC has learned that Prime Air is shedding significant staff as part of Amazon’s plan to cut 18,000 jobs, the largest layoff in history. Sources familiar with the matter, who asked not to be named for confidentiality, said they learned of the Prime Air cuts on Wednesday, when two senior Amazon executives they sent emails to employees to notify them that those affected by the layoffs will be notified shortly. One person realized what was happening when they no longer had access to Slack.

Employees were laid off in multiple locations, including Seattle, where Amazon is headquartered. Amazon’s drone testing site in Pendleton, Oregon, was hit particularly hard, with half the team laid off, one Prime Air employee wrote in a LinkedIn post that he has since deleted.

Amazon declined to say how many Prime Air employees were laid off, and a spokesperson pointed back to Jassy blog post from earlier this month announcing company-wide cuts.

Jassy has resorted to cutting Amazon’s workforce, which has grown massively during the Covid-19 pandemic, as it looks for ways to cut costs across the company. As part of his review, Jassy focused on some of Amazon’s more unproven bets, such as Alexa, physical stores and robotics divisions. Now Prime Air is being added to the target list.

For Bezos, the job cuts represent the latest setback in an ambitious project that has been plagued by challenges.

Amazon spent years testing drone technology in the English countryside to help Bezos realize his vision of even faster delivery and drop off some products without relying solely on the gas-guzzling vehicles that clog the surrounding roads.

However, society scaled back drone operations in the UK According to the 2021 story WiredPrime Air teams tasked with tagging drone footage raised concerns of management dysfunction.

Then in 2019, Jeff Wilke, who was Amazon’s chief consumer officer at the time, he announced drones would be operational “within months”. A year laterThe Federal Aviation Administration has granted the company approval to begin trial deliveries of drones.

But doubts about the drones’ viability have been raised after the Prime Air unit suffered high turnover and staff said they were under pressure to meet ambitious internal targets, sometimes at the risk of safety, they say Bloomberg. Employee walkouts accelerated after several crashes at Prime Air’s Pendleton test site. One incident in June 2021 sparked a 20-acre fire, Insider reported.

“No one was ever hurt or injured as a result of these flights, and each test is conducted in accordance with all applicable regulations,” Av Zammit, an Amazon spokesman, said in an emailed statement.

Liftoff finally appeared in 2023. Prime Air Chief David Carbon, Ex Boeing The executive brought in by Amazon in 2020 told reporters at an event last November that by the end of the decade, the company aimed to deliver 500 million packages a year by drone to millions of customers in major cities such as Seattle, Boston. and Atlanta. Carbon showed off a concept drone that Amazon could start using in 2024 that is smaller and quieter than its current model.

Two employees said Carbon, who replaced Prime Air co-founder Gur Kimchi, was hired to turn Prime Air into a real business with a reasonable budget.

Now that Prime Air is embarking on its biggest real-world experiment yet, the parent company is anticipating slowing growth and macroeconomic headwinds. Jassy said in its layoff announcement this month that company leaders are “prioritizing what is most important to customers and the long-term health of our businesses.”

Sources familiar with Prime Air said the cuts to drone deliveries were expected given the division’s many problems. Employees in the design, maintenance, systems engineering, flight test and flight operations departments were among the layoffs, the sources said.

Zammit said Amazon remains committed to its delivery operations in its two initial markets — College Station, Texas, and Lockeford, California.

“We will gradually expand supply to additional customers in these areas over time,” Zammit said. “Our team also continues to work on developing our next-generation drone system.”

Drones in the neighborhood

In College Station, a city about 100 miles northwest of Houston that is home to Texas A&M University, Amazon’s drone delivery center sits just off the interstate, tucked behind a row of car dealerships. In on-site storage, all merchandise must weigh five pounds or less.

Four launch and landing pads occupy the site, where drones will be sent to deliver goods to residents of several suburban neighborhoods located within a few miles of the facility.

Lockeford is a town of 3,500, south of Sacramento. An Amazon executive said in July that Amazon chose the two markets because of their demographics and topography after looking at locations around the country.

Nina Rinchich is one of the College Station residents who signed up to try Prime Air. About a month ago, an Amazon employee visited her home in Edelweiss Gartens, a subdivision a few miles south of Amazon’s drone facility.

Prime Air test participants were given a QR code-like tile that instructs the drone where to land.

Tyler Tesch

Rinchich said she has always embraced new technology and loves the idea of ​​more convenience. He has a smart TV, an Echo speaker and smart light bulbs at home.

“Anything that makes my life easier is a good thing,” Rinchich said.

Prime membership is required to participate in the Service. Residents also must live roughly four miles from Amazon’s facility, and their yards must meet certain specifications, such as not being near power lines or trees that could obstruct the drone’s flight path. To entice potential participants, Amazon is offering them gift cards worth up to $100.

Once a person logs in, an Amazon employee will come to measure their backyard. If it meets Amazon’s requirements, the customer receives a tile with a unique QR code that helps the drone recognize where to land. The yard should be clear when the drone approaches.

While Rinchich said she signed up “without hesitation,” not everyone around her shares her enthusiasm.

Some residents of College Station and surrounding towns attended a “meet and greet” in July, where Amazon showed off the Prime Air drone up close and let people sign up for the service.

Patrick Williams, a software engineering consultant, took his 12-year-old daughter Monica. They live in a rural area called Foxfire, less than two miles by car from the Amazon facility. Monica Williams told CNBC that she was surprised by the size of the drone. Each is about 6.5 feet wide and nearly 4 feet tall, weighing 87 pounds. That’s with nothing on board.

College Station resident Monica Williams poses with a Prime Air drone at a community event in July.

Patrick Williams

“It was maybe twice the size of me, or three times. It was huge,” Monica said. “It makes me nervous to have something that big flying over me all the time.

Debates about security, privacy

The same month as the meet and greet, the College Station City Council held a meeting with Prime Air employees in attendance.

Concerns about safety, privacy and noise were common themes among residents who spoke at the meeting. One person suggested that homeowner associations consider banning drone deliveries entirely in their communities.

City Councilman Dennis Maloney asked Sean Cassidy, Prime Air’s director of safety, flight operations and regulatory affairs, how loud the drones would be.

“If I’m a neighbor and I’m nine feet away, is that going to sound like a car backfiring?” Maloney asked.

“We’re a little resistant to direct comparisons with gas-powered things,” answered Cassidy, a former Alaska Airlines pilot. “It’s the buzzing sound you associate with an electrically powered device that happens to have a propeller attached to it. And it’s for a very short period of time.”

Prime Air drones are not expected to exceed a noise level of 58 decibels at any limit, according to the FAA’s environmental assessment. released in December. That’s below the limit set by College Station’s daytime noise ordinance, which says noise at the property line cannot exceed 63 decibels, about as loud as an outdoor air conditioner, one official said at the meeting.

Amazon has sought to ease residents’ fears of constant drone traffic overhead. The company expects to operate up to 25 flights a day over the delivery eligible area, which is divided into four different zones.

“It’s a very modest, incremental launch, and that’s basically the whole purpose of this,” Cassidy said. “Learning through operational lessons, through community feedback, through getting direct feedback from our customers on how we can improve operations.”

As for the accidents, Cassidy said those incidents are part of the testing process. He said Amazon has high security standards for public exams in College Station and Lockeford.

“We use it to test range with our experimental aircraft and the reason we do it is so we can squeeze all these things out before we present them to our customers,” he said. “It’s our responsibility to make sure the first delivery and the thousandth delivery are safe.”

College Station residents have also expressed concern about the prospect of drones harming deer, foxes and birds that are native to the area. An FAA review of Prime Air’s proposed operations at College Station found that they are unlikely to disturb wildlife. Amazon also assured the FAA that it will monitor the flight area for birds such as bald eagles and woodpeckers and take precautionary measures if deemed necessary.

Tyler Tesch Company, a Google software engineer, registered with Prime Air shortly after moving to College Station. He said he received an email from Amazon earlier this month requiring him to agree to Prime Air’s terms, including staying at least 100 feet from the drone or inside the home during the delivery and agreeing not to touch or throw anything. while doing so.

“We will be rolling out the service in phases to members of your community over the coming months,” the email said. “As we continue to expand, we’ll let you know when drone delivery is available for your home.”

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