DroneUp layoffs accompany pivot to drone delivery focus

Though clearly still in the early stages of their development and growth, rapidly scaling drone delivery services made the ascending activity seems invulnerable to the layoffs rocking the wider US tech sector – an assumption that Amazon, and now DroneUp are have proven incorrect.

Though Amazon’s recurring woes, setbacks, and staff cuts in its drone delivery operations have been public for some time, this week brought news that Walmart-allied DroneUp is now also carrying out layoffs. Word of the cuts was reported by CNBC on Tuesday, with a version of that story including confirmation from a company official that a limited number of pink slips are being handed out.

The report arose from two DroneUp employees revealing they’d been terminated Monday. It was later learned other dismissals were underway despite the drone company’s expanding delivery activity. 

Read: Walmart expands drone deliveries to 4 million potential households 

A sizeable portion of that growth across several US states had been linked to the firm’s partnership with Walmart, which also has an equity stake in the Virginia-based startup. In contrast to the oft-delayed and halting work by Amazon to launch and expand drone deliveries, DroneUp’s upward trajectory has been constant and growing.

But that, indeed, may be a key to its current layoff moves. 

According to insiders cited in the CNBC report, the downsizing is tied to DroneUp’s decision to phase out its other enterprise drone services like mapping, real estate photography, and construction surveying in order to focus on the faster and higher growth potential of delivery activities.

“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,” CNBC quoted a statement from DroneUp CEO Tom Walker.

Walker contended only a “a small percentage” of DroneUp’s staff of 418 people were being let go, and that “we will hire more people than were laid off” as the firm continues to scale drone deliveries over the next half year.

Read: DroneUp makes move to expand booming US activity to Europe

Unlike established tech sector companies that have suffered mass layoffs for reasons that – thus far – largely exist in the recession fearing minds of profit transfixed CEOs and investors, nascent drone delivery startups with the potential for dramatic scaling had seemed safe from that pain. Another downsizing hedge comes from the automated flight systems that obviate the need for larger, per-craft piloting staffs in the first place. 

Leading companies like Zipline, meanwhile – which operate freely as Part 135-certified air carriers – avoid most restrictions and all re-approval requirements those operating under Federal Aviation Administration waivers deal with. Those include Amazon, whose own recently launched drone delivery networks in Texas and California have reportedly been considerably hampered by heavy regulation limitations.