Dive Brief:
- One Medical is closing several offices and moving its chief financial officer to a role focused on growth as Amazon attempts to reallocate internal resources to cut costs.
- One Medical plans to close offices in New York City, Minneapolis and St. Petersburg, Florida, by the end of February, according to an internal email obtained by Business Insider. The company will also downsize its San Francisco office space to one floor.
- An Amazon spokesperson confirmed the changes to Healthcare Dive and said the company is reducing its investment in corporate office space given many One Medical corporate employees work remotely.
Dive Insight:
Amazon acquired One Medical for $3.9 billion in a deal that closed early last year. The company had growing revenue but was not profitable at the time of the acquisition, reporting an operating loss of $420 million in 2022.
Amazon hasn’t broken out One Medical’s financial results since the acquisition, or its membership growth. The e-commerce giant has embarked on a number of initiatives to expand the primary care operator’s reach.
That includes cheaper memberships for users of Amazon’s Prime discount program, a gambit that’s had “very good take-up” since launching in November, Amazon CEO Andy Jassy told investors last week during the company’s fourth quarter earnings call.
On the call, Jassy also praised “momentum” in its online Amazon Pharmacy business. Yet, Amazon is downsizing both that division and One Medical. Amazon said earlier this week it plans to lay off several hundred employees at One Medical and Amazon Pharmacy.
It’s the latest round of job cuts for Amazon. The company announced in early 2023 it had cut 27,000 roles company-wide. Later that year, Amazon Pharmacy let go 80 employees, while a number of healthcare roles were dissolved when Amazon’s hybrid care offering Amazon Care shut down.
Along with the layoffs and office reductions, Amazon is also enacting a regional operating model for One Medical, expanding its core operating regions from four to seven and creating a new role to lead operations, according to BI. The company is also moving CFO Bjorn Thaler to a new position focused on growth initiatives, reporting to VP of Health Services Neil Lindsay.
In another change, One Medical’s legal, finance and technology teams will report to Amazon’s healthcare business, entwining the primary care division’s operational structure more tightly with that of its parent company, BI reported.
Along with One Medical and Amazon Pharmacy, Amazon also operates a telehealth marketplace called Amazon Clinic, which expanded nationwide last year. And last month, Amazon launched a program to connect users with chronic conditions to disease management partners.
The tech giant is also angling into the artificial intelligence-enabled clinical notetaking space, launching an Amazon Web Services tool last year. The tool, called HealthScribe, allows providers to build applications that use speech recognition and generative AI to document patient visits.
