Healthcare seen as safe bet in Amazon's cost-cutting review

CEO of Amazon Andy Jassy is conducting a cost-cutting spree to scale back on unprofitable businesses at the company, but the retailer said it is continuing to invest in healthcare, where it sees growth and potential, The Wall Street Journal reported Nov. 10.

People familiar with the matter told the Journal that Mr. Jassy has an intense interest in reducing expenses and is honing in on profitability. This comes as the company lost $3 billion this year after posting net income of about $33 billion in 2021 and $21 billion in 2020. 

One of the businesses the retailer is shutting down is its telehealth service, Amazon Care, which will be no longer available after Dec. 31. 

The move comes as the virtual care service failed to provide "a complete enough offering"  for Amazon's large enterprise customers.

But the company's foray into healthcare is one the retailer sees as profitable, according to the sources, who say Amazon is interested in continued investment in the industry.  

Amazon currently has a $3.9 billion acquisition on the table with virtual and in-person primary care company One Medical. 

If the deal is approved, it would give the retailer a larger foothold in selling healthcare services to employers.

There is also speculation that Amazon may not be done in the virtual care arena. 

On Nov. 9, Amazon posted a video to its YouTube channel describing a new telehealth service called Amazon Clinic.

The video described a telehealth service where patients could fill out a questionnaire about their symptoms and meet virtually with a clinician for a fee. Clinicians could diagnose the patient and provide prescriptions as necessary. 

According to the video, the potential telehealth services would be offered through "third-party healthcare provider groups."

The video was deleted shortly after it was posted.

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