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Amazon.Com Inc (NASDAQ:AMZN) has discontinued its Prime Air drone delivery operations in Lockeford, California, a town of 3,500. Lockeford was Amazon.com’s second U.S. drone delivery location after College Station, Texas.
The company began operations in Lockeford in June 2022 but closed this site without disclosing specific reasons for the decision.
Amazon assured that it would provide other employment opportunities to all affected employees and continue serving Lockeford customers through alternative delivery methods, TechCrunch reports.
Also Read: Amazon’s Earnings Poised for Boost from AWS, Ads, and Retail Innovation: BofA Analyst
Meanwhile, drone deliveries in College Station will persist, and a new delivery site in Tolleson, Arizona, is scheduled to start later this year. With a population of just over 7,000, Tolleson lies in the Phoenix metropolitan area and will benefit from same-day deliveries facilitated by a hybrid fulfillment center/delivery station.
The launch timing is pending due to negotiations with local authorities and the FAA.
Drone delivery expansion could have been faster due to regulatory hurdles, indicating Amazon’s cautious approach to deploying this new technology.
Tolleson will be the only new site added this year, with further expansions postponed until at least 2025.
Prior reports indicated Amazon’s drone service will likely launch in select locations in the U.K. and Germany. Amazon also noted potential in generative AI for tasks like package identification, damage detection, and real-time decision-making.
Amazon stock gained 67% in the last 12 months. Investors can gain exposure to the stock via SPDR Select Sector Fund – Consumer Discretionary (NYSE:XLY) and Vanguard Consumer Discretion ETF (NYSE:VCR).
Price Action: AMZN shares are trading higher by 0.62% at $178.33 premarket at last check on Tuesday.
Also Read: Amazon Analyst Predicts Lead in AI Revolution with Strategic Cost Efficiency and Tech Innovations
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Amazon Prime Air Photo by Benthemouse on Shutterstock
