A year after Amazon acquisition, Whole Foods deals with centralization and layoffs

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The Whole Foods location in South Lake Union, just blocks from Amazon’s headquarters in Seattle, had a slightly different look on Monday. (GeekWire photo / Taylor Soper)

A year after its blockbuster acquisition of Whole Foods for $13.7 billion, Amazon is shaking up in the way the natural grocery store is run. A new efficiency-first ideology means greater centralization for the Austin, Tex.-based grocery chain — and the layoffs that come with it.

According to The Wall Street Journal, Whole Foods is laying off hundreds of in-store marketing employees. They were in charge of drawing out the familiar chalkboard signs, as well as organizing local events in an effort to connect Whole Foods stores with the communities they serve.

These layoffs are a sign of a greater push for centralization at Whole Foods. More and more decisions, like finance and purchasing, are being made at the headquarters in Austin rather than at individual stores. According to The Wall Street Journal, Whole Foods executives say that centralization will improve efficiency and save money. The Journal also said that hundreds of layoffs have led to calls for unionization within the company. Whole Foods did not immediately respond to GeekWire’s request for comment on the claims.

In March, dozens of Whole Foods executives and senior managers reportedly left the company. The turnover was said to have caused concern among suppliers and employees about Whole Foods losing its identity as it continues to integrate with Amazon.

Things shifted in the supply chain, too. The Wall Street Journal said suppliers were angered by the higher rates Whole Foods charged them to sell products. Whole Foods now charges at least a 3 percent fee to restock items and run promotions for suppliers who sell $300,000 worth of merchandise annually.

This comes with worry from suppliers about centralizing merchandising decisions, which could give Amazon more control over Whole Foods. Local brands could also disappear from Whole Foods shelves.

Centralization is not the only thing Amazon has changed at Whole Foods as the two companies integrate. On the same day that the deal closed in 2017, Amazon slashed prices on some items, started offering Whole Foods items on its website, and selling Amazon hardware like Echo speakers in-store.

Other changes came within the year, with discounts for Amazon Prime members among them.



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