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On cost-cutting spree, Amazon closes One Medical corporate offices across multiple US Cities

In a strategic move to optimise resources and reduce costs, Amazon is closing several corporate offices of primary care operator One Medical, just days after announcing plans to lay off employees within the company. The e-commerce giant is reshaping its corporate footprint, focusing on internal reallocation to streamline operations.

According to media reports, One Medical is set to close offices in New York City, Minneapolis, and St. Petersburg, Florida, by the end of February. Simultaneously, the San Francisco office space will be downsized to a single floor. An Amazon spokesperson confirmed these changes, emphasising the reduction in corporate office investment due to the significant number of One Medical corporate employees working remotely.

The restructuring follows Amazon's acquisition of One Medical for $3.9 billion in early 2023. Despite the primary care operator experiencing growing revenue, it reported an operating loss of $420 million in 2022 at the time of the acquisition.

While Amazon hasn't disclosed One Medical's financial results or membership growth since the acquisition, the e-commerce giant has undertaken various initiatives to expand the primary care operator's reach. This includes offering discounted memberships to Amazon Prime users, which has seen substantial uptake since its launch in November, according to Amazon CEO Andy Jassy.

Despite the positive momentum in its online Amazon Pharmacy business, Amazon is downsizing both that division and One Medical. The recent announcement of several hundred layoffs at One Medical and Amazon Pharmacy is part of a broader trend, as Amazon previously cut 27,000 roles company-wide in early 2023.

In addition to layoffs and office closures, Amazon is implementing a regional operating model for One Medical, expanding its core operating regions from four to seven. The company is creating a new role to lead operations and shifting CFO Bjorn Thaler to a position focused on growth initiatives under the guidance of VP of Health Services Neil Lindsay.

Furthermore, a notable change involves the integration of One Medical's legal, finance, and technology teams with Amazon's healthcare business, creating a tighter operational alignment between the primary care division and its parent company.

Aside from One Medical and Amazon Pharmacy, Amazon operates a telehealth marketplace named Amazon Clinic, which expanded nationwide last year. Additionally, the tech giant recently launched a program connecting users with chronic conditions to disease management partners and ventured into the artificial intelligence-enabled clinical notetaking space with the HealthScribe tool, powered by Amazon Web Services. This tool allows providers to build applications utilising speech recognition and generative AI to document patient visits.

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