Amazon.com Inc. has laid off dozens of staff from its Prime Air drone delivery unit as it seeks to outsource drone manufacturing.
The Financial Times reported today that the layoffs involve research and development staff along with manufacturing staff in a push to get what it said is its “heavily delayed ambitions off the ground.”
The Times also said Amazon has reached tentative deals with two external manufacturers to build component parts — Austrian company FACC AG and Spain’s Aernnova Aerospace S.A. Both companies build components for the aircraft industry. Full agreements between the companies and Amazon are still being finalized, according to the report.
Amazon may not stop there with its outsourcing program. Requests for proposal reportedly have been sent out to a number of companies in the drone market this year.
Amazon’s moves don’t come as a surprise given Prime Air’s ongoing delays. Amazon Prime Air was announced by Jeff Bezos in 2013 with a promise at the time that it would be coming sometime after 2015. The first trial delivery using a delivery took place in December 2016, while a new homegrown courier drone was announced in June 2019.
Regulatory issues have been one issue for Amazon in trying to get Prime Air to market, but that’s no longer primarily the case. Amazon received initial regulatory approval for the Prime Air drone delivery service from the U.S. Federal Aviation Administration in August.
An unnamed source quoted by the Times describes drone deliveries at large scale as still being “years away,” with development set to progress “slowly but surely” in the new year. By contrast, Jeff Wilke (pictured), Amazon’s head of worldwide consumer, said at an event last year that “we expect to scale Prime Air both quickly and efficiently, delivering packages via drone to customers within months.”
Amazon has confirmed the layoffs but not the outsourcing story, saying in a statement that “as part of our regular business operations, we are reorganizing one small team within our larger Prime Air organization to allow us to best align with the needs of our customers and the business. For affected employees, we are working to find roles in the areas where we are hiring that best match their experience and needs.”
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