Amazon Flex driver Ricardo Escalona works to deliver his same-day orders during Cyber ​​Monday from an Amazon fulfillment center on November 27, 2023 in Tampa, Florida.

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Amazon A service that offers same-day delivery from mall and brick-and-mortar retailers is shutting down, CNBC has learned.

The company has stopped any new development of the service, it said Amazon Today, and will begin to phase it out, according to two people familiar with the matter. The people asked not to be named because they were not authorized to speak to the press.

A major part of the program will be closed by December 2, the people said. Amazon told CNBC that select retail partners will be able to continue fulfilling orders with Amazon Today until January 24, 2025.

A small number of employees will be laid off and given severance, the company said, while others will be transferred to other positions within Amazon.

Employees working at Amazon Today learned the news at a meeting Monday, where some staff were informed they would be laid off, the people said. About 300 employees were working at Amazon Today, the people said.

Amazon Today’s closure is the latest example of the company’s broader cost-cutting efforts.

Starting in 2022, Amazon CEO Andy Jesse has been driving cost-cutting across the company to meet rapidly changing macro conditions. Beginning in 2022 and extending through 2024, Amazon launched the largest layoffs in its history, eliminating more than 27,000 jobs. Jesse has taken a tougher stance on the company’s unproven, expensive bets than his predecessor, Amazon founder Jeff Bezos. Jassi has completed several projects, including a telehealth service, a video calling device for children and A rolling treasure truck.

Launched in 2022, Amazon Today allows retailers selling on Amazon to offer faster delivery from their brick-and-mortar stores and shopping malls in select cities. Amazon’s contracted Flex drivers, who make deliveries using their own vehicles, pick up packages and drop them off at customers’ doorsteps within hours of placing an order.

Amazon Today was part of the company’s push to get online shopping to shoppers’ doorsteps faster. Amazon continues to add more features focused on same-day delivery to increase sales and compete with other companies that offer ultra-fast delivery. That includes Instacart and DoorDash, which have expanded beyond food and groceries and into retail.

According to the program’s website, the company had signed up several retailers for Amazon Today. The list included Office Depot. Staples Petco; PacSun; vitamin and dietary supplement chain GNC; and Fabletics, the athletic clothing brand owned by actress Kate Hudson.

Amazon is working with retailers that have 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 faster delivery.

The decision to shut down Amazon Today came as a surprise because Amazon was in the process of onboarding other retailers, one of the people said. Company Service was also pitching More retailers at a conference last week.

The service is more expensive than traditional delivery routes where Flex drivers can fill their cars with packages from an Amazon warehouse, one of the people said. Amazon Today’s routes, which the company calls “retail deliveries,” typically didn’t fill a driver’s trunk, making the program less profitable for flex contractors.

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