In a recent announcement, technology behemoth Amazon disclosed plans for job cuts affecting hundreds of employees within its cloud computing business, Amazon Web Services (AWS).
According to its latest financial report, AWS has experienced substantial growth and now constitutes 14% of Amazon's total revenue. However, the company is realigning its focus, particularly in light of developments such as the expansion of its physical stores, Amazon Fresh, launched in 2020.
As part of this strategic shift, Amazon revealed its decision to discontinue its self-checkout system, Just Walk Out, from all its stores.
The job cuts primarily impact several hundred positions in sales, marketing, and global services, as well as a few hundred roles within its physical stores technology team.
An AWS spokesperson stated to the BBC, "These decisions are difficult but necessary as we continue to invest, hire, and optimize resources to deliver innovation for our customers."
Despite the reductions, Amazon affirmed its commitment to ongoing recruitment and growth, particularly in core business areas. The company emphasized the availability of thousands of job openings and its efforts to identify internal opportunities for affected employees.
While the cuts will be implemented globally, the majority of AWS roles are concentrated in Amazon's hometown of Seattle. Affected US-based employees will receive pay and benefits for at least 60 days, assistance in finding new employment, and access to transitional health benefits, in addition to being eligible for severance pay.
As of the end of last year, Amazon employed over 1.5 million full-time and part-time workers, excluding contractors and temporary personnel.
Amazon has been increasingly focusing on artificial intelligence (AI) initiatives through AWS, exemplified by recent investments in AI safety and research, such as the acquisition of Anthropic last month.
In a competitive landscape where tech giants like Microsoft are ramping up their AI capabilities, Amazon's strategic moves reflect broader trends in the industry. Earlier this year, Amazon made similar job cuts across subsidiaries Twitch, Prime Video, and MGM Studios, underscoring the broader challenges faced by the tech sector. According to US career consultancy Challenger, Gray & Christmas, the tech sector experienced a 73% increase in job cuts in 2023 compared to the previous year, totaling 168,032 layoffs. Photo by JOHN K THORNE from Universal , Universal, Wikimedia commons.