Amazon is planning to slash as many as 263 jobs at its unprofitable Quidsi unit that operates Diapers.com, Soap.com, BeautyBar.com and other online websites.
The Seattle-based tech major acquired Quidsi in November 2010 for $545m (£437m). However, the company continued to operate independently under its leadership team.
Amazon, in a notice filed with New Jersey Department of Labor on Wednesday (29 March), said the job cuts would take place this summer as part of its business restructuring.
The affected employees are those at Quidsi's Jersey City, New Jersey, headquarters and customer service operation.
"We have worked extremely hard for the past seven years to get Quidsi to be profitable and unfortunately we have not been able to do so," an Amazon spokeswoman told Reuters.
The software development team at Quidsi would now focus on building technology for the grocery delivery service AmazonFresh, the spokeswoman added.
Quidsi, one of the largest online retailers for baby products, was co-founded by Marc Lore in 2005. Lore sold the company to Amazon as it faced competition from the latter's service Mom, which is a subscription programme wherein members can save 20% on diapers.
Lore then found e-commerce startup Jet.com, which was acquired by Walmart Stores last year. Lore is now the chief executive officer of Walmart's US e-commerce division.
"It is likely that Prime has grown to the point where members no longer separately shop on Diapers.com or Soap.com so maintenance of separate product-specific sites makes less sense," Wedbush Securities analyst Michael Pachter was quoted as saying by Reuters.
"It is possible that they are taking a shot at Mark Lore for competition at Wal-Mart."
Amazon is quite keen on attracting shoppers who order goods very often. It has more than 50 million US members in its Prime service.