Amazon Announces Closure of Fresh Supermarket Chain, Thousands of Jobs Affected
In a significant strategic shift, Amazon has officially announced the shutdown of its Amazon Fresh supermarket chain across the United States. This decision marks the end of a six-year effort to establish a physical grocery presence and will result in substantial job losses nationwide.
Widespread Store Closures and Workforce Impact
The e-commerce giant revealed plans to close approximately 60 Amazon Fresh stores, with WARN notices filed in multiple states confirming the scale of layoffs. California alone will see 20 Fresh stores shuttered, directly affecting around 3,900 employees. Most locations ceased public operations on February 1, though California stores will remain open until mid-March due to state regulatory requirements.
This represents one of Amazon's most substantial retail workforce reductions in recent years, reflecting the company's reevaluation of its physical grocery strategy.
Employee Transition Options and Compensation
Amazon has outlined comprehensive transition plans for affected employees, offering two primary pathways:
- Severance Packages: Employees who do not secure alternative positions within Amazon by late April will receive severance calculated as one week of pay for every six months of service at Amazon Fresh. Workers are guaranteed a minimum of four weeks' pay, with potential compensation extending up to 20 weeks based on tenure.
- Internal Transfers: The company is actively encouraging Fresh employees to apply for similar roles at Whole Foods Market locations or Amazon grocery warehouses through its internal A to Z portal.
All affected workers will continue receiving normal pay and benefits for 90 days following the closure announcement, or until April 28. Compensation calculations will be based on either the minimum pay for their employee classification or their average hours worked over the previous 60 days, whichever amount is higher.
"All affected employees will have the opportunity to apply for open roles within Amazon where available, and we're providing career transition services to help them explore options," stated an Amazon spokesperson.
Amazon Fresh Workforce Profile
Amazon Fresh associates typically earned between $16 and $20 per hour, according to data from job platform Indeed. Their responsibilities encompassed various grocery operations including order picking for delivery services and checkout management.
Strategic Reasons Behind the Closure
The decision to shutter Amazon Fresh stores stems from several strategic factors:
- Economic Sustainability Challenges: Amazon Fresh and Amazon Go stores, which featured Just Walk Out technology, struggled to establish both a distinctive customer experience and a sustainable economic model.
- Contrasting Performance: Meanwhile, Whole Foods Market, acquired by Amazon in 2017, has demonstrated strong growth with sales increasing more than 40% in recent years.
- Online Grocery Success: Amazon's digital grocery business has experienced remarkable expansion, with perishable grocery sales through Same-Day Delivery growing 40 times since January 2025. Fresh groceries have become one of the most frequently ordered categories on Amazon's platform.
This closure represents Amazon's strategic pivot away from certain physical retail formats while doubling down on successful ventures like Whole Foods and its rapidly growing online grocery delivery services.
