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Amazon Changes Course on Drone-Delivery Efforts

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Amazon.com  (AMZN) - Get Amazon.com, Inc. Report is changing course on how it plans to roll out drone delivery service to its members. 

The Financial Times reported on Thursday that the e-commerce giant is laying off dozens of research and development and manufacturing staff working on the delivery drone service, turning instead to two external manufacturers to build components for the drones.

Amazon's drone deliveries are still "years away," but development will "slowly but surely" progress in 2021, a person familiar with the matter told the newspaper. An Amazon spokesperson confirmed the layoffs to the FT and said the company was looking at vacant positions where the affected employees could be moved.

The e-commerce giant has so far reached tentative agreements with Austria's FACC Aerospace and Spain's Aernnova Aerospace to work on the components, the source told the FT. The company has also sent out a "request for proposal" to other third-party providers, the newspaper said.

Amazon has long explored and invested in automation technology within its supply chain to move goods and services as quickly as possible but has struggled with the so-called last mile of package delivery.

Amazon in June formally cut a deal to buy driverless-vehicle startup Zoox for more than $1 billion in a move that will accelerate the e-commerce giant’s reach into autonomous-vehicle technology and implementation - and to get it closer to getting goods ordered online directly to consumers' front doors.

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