With Amazon making headlines for chopping a whole bunch of jobs at One Medical and Amazon Pharmacy, an trade professional stated there might be a conclusion that Amazon is getting out of the healthcare enterprise. However that will be a 'too simplistic' conclusion.

“The corporate has made a collection of acquisitions, and I’d count on this to some extent as they decide the place there are overlaps between the totally different groups which were employed or acquired,” stated Christina Farr, an investor at OMERS Ventures, in an electronic mail -mail. “I can even think about Amazon investing in software program that will automate some capabilities, which might result in some downsizing. The corporate can also be making cuts throughout the board, whereas doubling down in different areas. I stay intrigued by Amazon's potential within the sector.”

Seattle-based Amazon has eradicated “a couple of hundred” healthcare jobs, the corporate confirmed to MedCity Information on Wednesday. The information broke for the primary time Enterprise insider Tuesday. It comes after a number of healthcare strikes the retail big has taken in recent times, together with its acquisition of virtually $4 billion from main care supplier One Medical; its introduction Amazon Clinic, a direct-to-consumer telemedicine service; and its launch RxPass, which provides greater than 50 generic medicines for $5 a month to Prime members. In November Amazon linked his Prime membership with One Medical. However the firm has accomplished simply that has closed a number of healthcare firmstogether with Amazon Halo, Amazon Care and Haven.

The job cuts are the results of a restructuring as the corporate continues its healthcare efforts Neil Lindsay, senior vp of Amazon Well being Companies.

“We’re seeing very robust momentum and constructive buyer suggestions on our healthcare providing,” Lindsay stated in a press release to MedCity Information. “As we proceed our mission to make healthcare simpler for purchasers, we’re refocusing plenty of assets to speed up our efforts to ship one of the best expertise for our sufferers, clients and members. Sadly, these changes will outcome within the lack of a number of hundred positions inside Amazon Pharmacy and One Medical.”

In a memo despatched to workers on Wednesday and shared with MedCity Information, Lindsay pushed again in opposition to any notion that this might sign bother for Amazon's healthcare enterprise.

“As typically occurs with some of these adjustments, some consultants might speculate that we’re chopping roles as a result of our healthcare sector is underperforming. Don’t imagine this hypothesis,” he stated. “Essentially the most profitable firms, those who present one of the best expertise for his or her clients, usually undergo phases of reorganization or realignment to place power the place they want it most. You've most likely seen many wholesome firms, each inside and outdoors of Amazon, realign their priorities these days, resulting in position reductions in some areas and expansions in others. That's what that is.”

However in line with one other trade professional, there have been “some headwinds setting the stage” for these job cuts.

“Amazon has beforehand cited provider recruitment points for One Medical and had tempered expectations that clinic progress can be depending on market circumstances,” stated Kate Festle, managing director of West Monroe's healthcare M&A bunch. “Limitations on supplier provide might have slowed clinic growth and that is the appropriate metric to replicate a flatter progress curve. This additionally follows One Medical's integration into the Prime subscription mannequin and so they might recalibrate prices to match their subscription volumes.”

Festle added that this isn't only a downside at Amazon. Gamers like Walgreens are additionally “by trying extra deeply on the unit economics of their main care footprint.” VillageMD, which is backed by Walgreens, is closing a number of clinics.

Amazon is supporting workers affected by the job losses with monetary help, continued advantages and profession help, Lindsay stated in a memo despatched to workers on Tuesday and shared with MedCity Information.

He additionally informed MedCity Information that the corporate will proceed to rent distributors and put money into know-how and groups.

Photograph: Flickr, Cerillion Skyline