Amazon’s drone pilots are having a tough time lifting off.
The e-commerce giant’s delivery drones, which operate in the test markets of College Station, Texas and Lockeford, Calif., are reportedly being hampered by the company’s 18,000 layoffs to start the year and as well as restrictions still in place by the Federal Aviation Administration (FAA) that prevent the service from flying delivery drones over people and roads.
An Insider report in February attributed part of the sputtering drone ambitions to the layoffs, which the publication said “decimated” the firm’s drone safety teams with accounts from anonymous employees. Amazon fired back against the allegations.
“It’s wrong to suggest that any role reductions or delays affect our commitment to safety or change our long-term plans to deliver this program for our customers,” Amazon spokesperson Maria Boschetti told Sourcing Journal. “We’re as excited about it now as we were 10 years ago—but hard things can take time, this is a highly regulated industry, and we’re not immune to changes in the macro environment. We continue to work closely with the FAA, and have a robust testing program and a team of hundreds in place who will continue to meet all regulatory requirements as we move forward and safely bring this service to more customers in more communities.”
According to a recent CNBC report, Prime Air vice president David Carbon has been telling the division’s staffers that the drone service’s durability and reliability (D&R) testing has been underway since at least last March. D&R testing is a key federal regulatory requirement needed to prove Amazon’s drones can fly over people and towns.
But the FAA didn’t provide clearance for D&R testing in the two markets until December, with Amazon officially beginning flights one month after. Before a broader rollout, Prime Air must complete several hundred hours of flying without any incidents and then submit that data to the FAA.
According to CNBC, Prime Air has signed up approximately 1,400 customers for the service between the two towns, but still can only deliver to a handful of homes. CNBC spoke to seven current and former Prime Air employees who said continued friction between Amazon and the FAA has slowed progress in getting drone delivery off the ground.
Amazon did not the confirm specifics in the CNBC report, which said the California site now only has one drone pilot certified to operate commercial flights. In the days after the January layoffs were announced, Amazon reportedly flew a staffer to Lockeford from College Station to help with deliveries.
But the one pilot may be plenty, pending the accuracy of the CNBC report. Drones at the Lockeford location can only deliver to two homes that are located next door to one another and sit less than a mile from Amazon’s facility. Employees have to regularly contact the two households eligible for delivery to remind them to place orders, and Amazon incentivizes them with gift cards, according to two people familiar with the situation.
An FAA spokesperson provided Sourcing Journal with an exemption the administration issued to Amazon on Nov. 9, 2022 that maintains many of the restrictions it originally put in place in an exemption it issued the company two years prior, largely preventing the company from flying over roads and people without permission.
Some of Amazon’s competitors in the drone space have gotten FAA exemptions to fly over roadways, including Google’s Wing Aviation and Walmart’s drone delivery partners Flytrex and Zipline.
The deceleration of Amazon’s drone delivery efforts has come as the company has sought amendments to the restrictions on flying over roadways and people. On Nov. 29, 2021, Sean Cassidy, Prime Air’s director of safety, flight operations and regulatory affairs, wrote to the FAA seeking relief from an order that dictates the operational conditions for Amazon’s drones.
In order to license each new model of drone, the FAA creates individual exemptions for every new model, as well as a list of conditions for the company attached to the new drone.
Cassidy said in the letter that Amazon’s then-new MK27-2 drone had several safety upgrades from the earlier model, the MK27, thus rendering many of the conditions set by the FAA obsolete. Among the restrictions Amazon sought to amend, which were unsuccessful, included the removal of a requirement to designate emergency landing areas and the scrapping of the 100-foot perimeter centered at takeoff and landing points.
A year later, in November 2022, the FAA declined Amazon’s requests. The agency said Amazon did not provide sufficient data to show that the MK27-2 could operate safely under those circumstances.
“Full durability and reliability parameters have not been established to permit operations in close proximity to or over people,” the FAA said.
Safety was also the central issue of the Insider article, with employees contending that the company’s job cuts allegedly had a negative impact at Amazon’s Pendleton, Ore. test site. Ahead of the layoffs, the location already had prior issues with a string of crashes, including one in 2021 that sparked a 25-acre brush fire.
“I think it says what their priorities are,” one current employee told Insider. If Amazon prioritized safety “as much as they like to tell the media, that team wouldn’t have gotten laid off.”
Employees contend the layoffs mean fewer people than before are watching to make sure every flight is safe. With fewer employees on guard, it could be harder to tell if the drone might be inadvertently flying over people, which it’s not certified to do.
“We can’t properly clear the airspace,” another employee said in the report. “We can’t really confirm that we aren’t flying over people.”
Making matters more flammable, a Prime Air manager at the Pendleton test site sued Amazon for retaliation after he said he was fired for reporting safety concerns. Amazon has stated the manager’s allegations are false.
While Amazon may be paring back manpower, it still is making the time to test out new iterations of drone technology. The company is developing its next-generation Prime Air drone called the MK30, and known internally as CX-3.
At an event in Boston in November, Carbon unveiled a mockup of the unmanned aircraft, which is supposed to be lighter and quieter than the MK27-2.
Carbon said Prime Air has a target to make of 10,000 deliveries this year between its two test sites, even with the D&R campaign unfinished and the FAA limitations firmly in place.
The MK30 is expected to launch in 2024, and will have to go through the same regulatory process including a separate D&R campaign. But this drone’s iteration also requires a “type certification,” an even more rigorous FAA benchmark that allows a company to produce drones at scale.
Thus far, only one company has received type certification to deliver commercially at scale, drone delivery firm and UPS partner Matternet.
The snags of the drone launch are just one in a recent string for Amazon, which is feeling the impact of the tech titan’s rabid cost cuts spurred on by CEO Andy Jassy.
Amazon pulls back on Go, HQ2 construction
Amazon is permanently closing eight of its 29 Amazon Go convenience stores in a decision that coincides with a pullback in its physical footprint and general focus away from the business’s unprofitable divisions.
The company confirmed it would shutter two Go stores in New York City, two locations in Seattle, and four stores in San Francisco. The stores will close on April 1, and Amazon said it will work to help affected employees secure other roles at the company.
Go stores weren’t the first of Amazon’s brick-and-mortar banners the e-commerce giant unveiled plans to shutter, with the company closing all 68 of its Amazon Books physical bookstores, Amazon 4-star and Amazon Pop Up shops.
Stores aren’t the only areas feeling the impact of budget cuts, with Amazon already having been reducing and subleasing select portions of its warehousing operations over the past year.
Amazon is also putting some construction of its second headquarters in Arlington, Va., dubbed “HQ2” on hold for an undisclosed period of time. The company is still expected to complete the first phase of its headquarters this June, but is pausing work on the larger portion of the project.
The headquarters is supposed to consist of two parts: Metropolitan Park, an “urban campus” capable of housing 25,000 workers, and PenPlace, a complex with three 22-story buildings and a corkscrew-shaped glass tower standing 350 feet tall. PenPlace, the second phase of the project, is the portion affected by the delay.
“We’re always evaluating space plans to make sure they fit our business needs and to create a great experience for employees,” said John Schoettler, Amazon’s head of real estate, in a statement. “And since Met Park will have space to accommodate more than 14,000 employees, we’ve decided to shift the groundbreaking of PenPlace out a bit.”