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Amazon’s drone division has been hit with layoffs over the launch of a long-awaited program

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Amazon Prime Air Drone

Source: Amazon

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

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

After ten years, Amazon is finally starting drone deliveries to two small markets through a program called Prime Air. But just as the drone program is finally getting off the ground, it’s facing a sputtering economy and CEO Andy Jassy cost-cutting efforts.

CNBC has learned that Prime Air is shedding a significant number of employees 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 sent emails to staff notifying them that those affected by the layoffs will be notified shortly. One person figured out what happens when they can no longer access Slack.

Employees were let go to several sites, including Seattle, where Amazon is headquartered. Amazon’s drone test site in Pendleton, Oregon, was hit particularly hard, with half the team let go, 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 to Jassy’s blog post since the beginning of this month, announcing company-wide layoffs.

Jassi has turned to cutting Amazon’s workforce, which has grown significantly during the Covid-19 pandemic, while he looks for ways to cut costs companywide. As part of his review, Jassi focused on some of Amazon’s more unproven bets, such as Alexa, physical stores and robotics divisions. Prime Air is now added to the target list.

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

Amazon spent years testing drone technology in the English countryside to help Bezos realize his vision of even faster delivery, delivering some products without having to rely solely on vehicles that guzzle gas and clog nearby roads.

However, the company reduced its drone operations in the UK According to the plot of 2021 WiredPrime Air teams tasked with tagging drone footage raised concerns about executive dysfunction.

Then in 2019, Jeff Wilke, who was Amazon’s head of consumer affairs at the time, announced the drones will be operational “for months.” A year laterThe Federal Aviation Administration has given the company approval to begin trial deliveries of drones.

But doubts about the viability of the drones have been raised since the Prime Air division experienced high staff turnover and employees said they were under pressure to meet ambitious internal targets, sometimes at the risk of safety. Bloomberg. Employee departures have accelerated following multiple accidents at Prime Air’s Pendleton test site. One incident in June 2021 caused a 20-acre fire, Insider reported.

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

In 2023, the inevitable start finally arrived. Prime Air chief David Carbone, ex Boeing The executive, who was brought in by Amazon in 2020, told reporters at an event last November that by the end of the decade, the company has set a goal of delivering 500 million packages by drone each year to a million customers in major cities such as Seattle, Boston and Atlanta. Carbon has demonstrated a concept drone that Amazon could start using in 2024 that is smaller and quieter than the current model.

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

Now, as Prime Air embarks on its highest-profile real-world experiment to date, the parent company is facing slowing growth and macroeconomic difficulties. In announcing the layoffs this month, Jassy said company executives are “prioritizing what is most important to our customers and the long-term health of our business.”

Sources familiar with Prime Air said the cuts to the drone delivery business were expected given the division’s many struggles. Some of the layoffs included employees of the design, maintenance, system engineering, flight test and flight operations departments, sources said.

Zammit said Amazon remains committed to its delivery operations in its two original markets of College Station, Texas, and Lockford, California.

“Over time, we will gradually expand to supply more customers in these areas,” Zammit said. “Our team also continues to work on the development of our next-generation unmanned system.”

Drones next door

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

Four launch and landing pads occupy the area, where unmanned aerial vehicles will be sent to deliver goods to residents of several suburban areas located a few miles from the facility.

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

Nina Rincic 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 Hortens, a subdivision a few miles south of the Amazon drone.

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

Tyler Tesch

Rincic said she is always embracing new technology and loves the idea of ​​added convenience. Her home has a smart TV, an Echo speaker, and smart light bulbs.

“Anything that makes my life easier is good,” Rincic said.

Prime membership is required to participate in the service. Residents must also live within about four miles of an Amazon facility, and their yard must meet certain requirements, such as being away from power lines or trees that could obstruct the drone’s flight path. To entice potential members, Amazon offers them gift cards worth up to $100.

Once a person signs up, an Amazon employee comes out to measure their yard. 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 must be clear when the drone approaches.

While Rincic said she signed on “without hesitation,” not everyone in the area shares her enthusiasm.

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

Patrick Williams, a software development consultant, took his 12-year-old daughter Monica. They live in a rural area called Foxfire, less than a two-mile drive from an Amazon facility. Monica Williams told CNBC that the size of the drone took her by surprise. Each is about 6.5 feet wide and nearly 4 feet tall, weighing 87 pounds. This is without anything on board.

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

Patrick Williams

“He was maybe twice my size, or three times. He was huge,” Monica said. “I just get nervous when something that big is flying over me all the time.”

Disputes about security, privacy

The same month as the meeting, 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 should consider banning drone delivery altogether in their communities.

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

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

“We kind of refuse to make direct comparisons with gas appliances,” replied Cassidy, a former Alaska Airlines pilot. “It’s a noise that can be associated with an electrically driven device that has a propeller attached to it. And this is for a very short period of time.”

According to an FAA environmental assessment, Prime Air drones must not exceed 58 decibels of noise in any area. issued in December. That’s below the threshold outlined in College Station’s daytime noise ordinance, which states that noise inside a home should not exceed 63 decibels, or about the volume of an outside air conditioner, one official said at the meeting.

Amazon tried to ease residents’ fears that there would be constant drone traffic overhead. The company expects to operate up to 25 flights per day over the delivery area, which is divided into four different zones.

“It’s a very humble, gradual start, and that’s basically the whole point of it,” Cassidy said. “Learning through operational lessons, through community feedback, through getting direct feedback from our customers about how we can improve.”

As for the crashes, Cassidy said those incidents are part of the testing process. He said Amazon has high safety standards for public testing in College Station and Lockford.

“We’re isolating it on the range with our experimental aircraft, and the reason we’re doing it is so we can squeeze all that stuff out before we show it to our customers,” he said. “It’s our responsibility to make sure that the first and the thousandth deliveries are safe.”

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

Tyler Tesh, 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 away from the drone or inside the home during delivery and agreeing not to touch the drone and don’t throw anything away. on this.

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

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