Amazon, the technology giant, has announced job reductions impacting hundreds of positions in its profitable cloud computing division, Amazon Web Services (AWS). This news comes as the company continues to invest in new business areas, including artificial intelligence while scaling back in others.
AWS has been a consistent growth driver for Amazon, currently representing 14% of the company’s total revenue. However, recent changes, like the termination of the “Just Walk Out” self-checkout technology in Amazon Fresh stores, indicate a strategic shift away from some physical retail ventures.
Job Losses Span Several Divisions
The latest job cuts will affect several hundred employees across AWS’s sales, marketing, and global services units. There will also be an additional reduction of several hundred positions within the physical stores technology team.
An AWS spokesperson stated, “These decisions are difficult but necessary as we continue to invest, hire, and optimize resources to deliver innovation for our customers.” They further emphasized that thousands of jobs remain available and the company is working to find internal opportunities for affected employees.
Amazon will provide US-based employees with a minimum of 60 days’ pay and benefits, along with help finding alternative employment, transitional health benefits, and severance pay. These job reductions primarily impact the Seattle-based AWS division.
Focus on AI Growth
Despite recent cuts, Amazon remains committed to investing in artificial intelligence (AI) through AWS. Recent investments in safety and research startup Anthropic highlight this focus, alongside continued hiring in core business areas.
Amazon’s decision aligns with a broader trend of layoffs throughout the tech sector in 2023. Companies like Microsoft, heavily invested in ChatGPT, are facing pressure to adapt amidst intense competition within the AI landscape. This marks an ongoing period of volatility and restructuring within the tech industry.
