Amazon Fires Drone Delivery Staff In Dozens, Increasing Reliance On Partners To Meet Ambitious Goals: FT

Amazon.com, Inc AMZN is retrenching workers engaged in research and development and manufacturing at its delivery drone project — instead, seeking external assistance in bringing its ambitious plans to fruition, the Financial Times reported Wednesday. 

What Happened: Dozens of workers were laid-off by the Jeff Bezos-led company as it reached agreements with two external manufacturers in recent weeks to manufacture components parts of its delivery drones, according to FT.

The agreements, full terms of which are yet to be finalized, were signed with Austria’s FACC Aerospace and Spain’s Aernnova Aerospace, a person familiar with the matter told FT.

The retail giant is also looking at other external firms, according to FT.

“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,” an Amazon spokesperson confirmed the layoffs to FT.

The spokesperson said the company was “working to find roles in the areas where we are hiring that best match their experience and needs.”

Why It Matters: Drone deliveries though revealed seven years ago by Bezos have yet not been fully deployed and are still “years away,” according to an unnamed source of FT.

DroneAnalyst’s head of research David Benowitz said that Amazon is “not meeting the lofty goals and the original vision quite yet.”

Walmart Inc WMT is already on its way to trial deliveries with San Francisco, California-based firm Zipline.

The U.S. Federal Aviation Administration has received Part 135 certification to carry out highly-controlled testing but has not yet shared details of its trial plans. 

Price Action: Amazon shares closed 0.96% lower at $3,105.46 on Wednesday.

Related Link: Flytrex Partners With Walmart To Bring Drone Delivery To North Carolina