Amazon shutters customer-backed charity program in latest cost-cutting measure
Amazon has been looking to tighten its belt in the face of global economic challenges since last year, highlighted by the recent layoff of over 18,000 employees, the biggest in its history. Its devices andAlexateams were not even spared from thee-commerce giant’s cost-cutting measures,nor Comixology, and now the latest casualty is its customer-backed charity program. Amazon is shutting down AmazonSmile, which allowed customers to donate a portion of their purchases to a charity of their choice.
In anannouncement to employees, Amazon revealed that the program will be shuttered on February 20th after nearly a decade. The decision was made after it became clear that AmazonSmile was not having the intended impact. According to Amazon, the charitable service was hamstrung by the volume of participating organizations, while donations from buyers “were often spread too thin.”
According to Amazon,more than $377 million has been donatedto charitable organizations worldwide through the program. This equates to a paltry $377 donation for each charity on average, assuming all 1 million organizations received an equal share, which is far from being enough to keep the program running.
The program was launched in 2013 to allow shoppers to donate 0.5% of every purchase to any eligible organization at no extra cost to them. To somehow appease those affected by the move, Amazon will give a one-time donation that’s equivalent to three months of what they earned through the program last year. Charities hosted on AmazonSmile will continue to receive revenue from shopping donations until next month.
By discontinuing AmazonSmile, the retail giant chose to redirect its efforts to other charitable endeavors that it believes will result in more meaningful change. For example, Amazon is investing $2 billion in affordable housing projects. The program also seeks to provide financing for the computer science curriculum for 1 million students and deliver 12 million meals this year in partnership with food banks. These charitable works will be funded using other means.
The latest cost-cutting measure comes after Amazon took several steps to reduce expenses, including a hiring freeze, canceling a few experimental programs, and halting the construction of more warehouses.
This article is sponsored by Total Wireless.
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