On Wednesday, Amazon.com said that it would shut down Quidsi, the division that runs sites like Diapers.com and Soap.com because it simply isn’t profitable. AmazonFresh will absorb the sites and some of their workers in the near future.
The move comes nearly seven years after the online retail giant acquired Quidsi for $545 million back in 2011. The buyout still stands as the fourth biggest in the history of Amazon, and it was significant at the time because Diapers.com was on track to become a serious threat to the company.
Now, Amazon.com is the largest e-commerce business in the world, with operations mainly based in the United States and the U.K. Alibaba has an important place in the Asian market, but remains a close second to the Seattle giant.
263 employees will lose their jobs
Diapers.com CEO Marc Lore founded Quidsi as the parent company to manage all the businesses that were stemming from the initials supplies retailer.
After the success of Diapers.com, Soap.com, and other branches like Wag.com, Quidsi rose as a centralized firm with headquarters in Jersey City, New Jersey. Now, more than 260 employees from the company will lose their jobs.
Amazon.com has said most of these workers have the option to apply for a job at the online retail giant, be it in warehouses or in main offices spread around the country. Positions at the Seattle headquarters may also be an option.
The company intends to absorb most of the software development talent from Quidsi to work on AmazonFresh, the new shopping division focused on groceries. Inventory from all the subsites will go directly to Amazon.com and sell there.
Marc Lore and Jeff Bezos are not getting along
Marc Lore worked at Amazon until 2013 as part of the acquisition deal that saw him and his web site defeated by the e-commerce giant. However, he rose from the ashes in 2015 with a fresh new take on online shopping, a platform called Jet.com.
Jet reported skyrocketing success in the year after its launch, but it met some financial difficulties along the way that were not known until after Wal-Mart came in to save the day.
Wal-Mart bought Lore’s new company for $3.3 billion last year, and it kept him on the wheel to drive both retailers to success. The CEO has said he intends to dethrone Amazon as the main online marketplace in the country.
For this reason, some people have plotted that rival CEO Jeff Bezos has shut down Quidsi out of spite for Lore. Nonetheless, it remains a more plausible scenario that he did so because he collected all the data he needed and he just couldn’t afford to keep a money-losing business running at Amazon’s expense.
Source: Bloomberg