Amazon's drone business can't get off the ground as regulations, weak demand stymie progress

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Amazon's drone delivery business has been bleeding cash as it tries to meet regulatory hurdles and incentivizes early customers to submit orders.

Employees who remain after the layoffs told CNBC that morale in the division has continued to sink since the cuts. With more work to do and less clarity on their parent company's ongoing commitment to the mission, some are saying that they and their colleagues have started searching for jobs.

Of particular note was an effort in late 2021 to get a key rule changed. On Nov. 29 of that year, 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, according to government filings.

"Full durability and reliability parameters have not been established to permit" flying over or near people, the FAA said. But by October, the Pendleton crew was still "living out of their suitcases," one employee said, while the company paid for their room and board. Some staffers viewed the launch as a rushed effort and questioned how the service would be able to operate fully without the ability to fly over roads or cars, former employees said.

 

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