Walmart’s drone delivery partner is cutting jobs across the company amid a shift in its operating strategy.
Virginia-based DroneUp announced a series of layoffs for its team, which is now made up of 418 people. Founded in 2016, the company owns a fleet of quadcopter drones that are geared toward last-mile delivery, flying items from warehouses to people’s doorsteps.
It is not clear who was affected by the layoffs, although employees have indicated that flight engineers and instructors, as well as flight and development service engineers, were among those who were let go. LinkedIn posts also point to business analysts, marketing managers, and the company’s director of business development as being part of the cuts.
The CEO of DroneUp, Tom Walker, insists that this is no cause for concern. He explained that the layoffs only represent “a small percentage of the team” and are part of a shift away from enterprise services like real estate inspections and aerial data capture in favor of deliveries of consumer goods by drone.
He said that increasing growth in their drone delivery business would ultimately see them “hire more people than were laid off.” They currently operate 36 hubs out of Walmart stores that deliver goods within a 1.5-mile radius of the store.
“After tremendous consumer adoption of our drone delivery services, we have made the decision to shift our business model to align our company structure around the continued growth and success of drone delivery and other drone services out of our hubs,” he said.
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Amazon's drone delivery efforts are falling short
Although Walker is painting a positive picture of the company’s future, it is worth noting that Amazon cut a significant number of staff in its Prime Air drone division earlier this year as part of a larger series of company-wide layoffs.
Although the retail giant projected in January that they would be sending 10,000 deliveries to customers by drone by the end of the year, they are off to a very slow start. A February report indicated they had served fewer than 10 households, and they don’t appear to be picking up the pace yet.
A representative of Amazon, Av Raichura Zammit, admitted in an email that “the phased process for expanding our service areas is taking longer than we anticipated. We’re working with the FAA and plan to expand deliveries to more customers over time.”
The company has said it has never experienced an incident in a delivery flight, but one high-profile crash at its test site in Oregon sparked a 25-acre brush fire.
Meanwhile, Alphabet’s drone delivery division, Wing, saw a number of job cuts as part of wider layoffs throughout the firm. Although Wing still appears to be moving full steam ahead, Amazon’s drone network is stagnating.
Walmart hopes to scale its drone delivery service soon
Statistics released by Walmart about its drone deliveries show that they completed more than 6,000 deliveries by drone in 2022 of items ranging from paper towels and ice cream to chicken. The retailer met its goal of operating hubs in seven states by the end of that year. The potential for expanding their service is noteworthy; Walmart has 4,700 stores located within 90 percent of the American population, and more than 85 percent of the items they sell meet the weight and size requirements for drone delivery.
Nevertheless, scaling commercial drone delivery has been slow, with a complicated process for gaining regulatory approval and numerous technical challenges.
Earlier this month, DroneUp commended the passage of a bill supporting the local drone industry by the Florida legislature. It is expected to facilitate the construction of drone ports throughout the state.
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