Just a few days after announcing a significant round of layoffs that will impact 18,000 employees, Amazon is trying to find money wherever it can as the company announced that it would end AmazonSmile.
AmazonSmile is a donation program that redirects 0.5% of the cost of all eligible products toward charities. It is a separate website that lets you browse and buy items just like on Amazon.com. But Amazon would keep track of your purchases and donate money on your behalf.
The company started sending an email to Amazon customers announcing the change. AmazonSmile will remain open until February 20, 2023.
“After almost a decade, the program has not grown to create the impact that we had originally hoped. With so many eligible organizations — more than 1 million globally — our ability to have an impact was often spread too thin,” the company wrote.
Since 2013, Amazon has donated $400 million through the AmazonSmile program. Bigger organizations likely received a bigger share of those donations while smaller ones only received a few dollars per year. But nonprofits are not going to say no to $400 million…
Charities that have participated in the AmazonSmile program will receive a one-time donation from Amazon that will be equivalent to three months of AmazonSmile donations. It’s a sort of severance package for nonprofits.
The end of the program is going to have an impact on Amazon’s bottom line in two ways. First, the company no longer has to set aside 0.5% on purchases made on AmazonSmile. Second, there were people actively working on the separate storefront, charity relationships and more. Shutting down AmazonSmile means that the company can lay off some people who were working on the program.
Amazon started informing people who are impacted by the layoffs yesterday. The timing of this announcement means that the end of the AmazonSmile program is directly tied to the company’s biggest-ever round of jobs cuts.
Amazon currently has a market capitalization of $974 billion. In its most recent earnings report, the company announced $2.5 billion in operating income. It wasn’t a record quarter, but Amazon isn’t on the verge of bankruptcy.