Layoffs Hit Cloud Division After Internal Review
Amazon confirmed it is laying off employees within its cloud computing arm, Amazon Web Services (AWS), as part of a restructuring effort aimed at realigning organizational priorities. While the company did not disclose the exact number of layoffs or the specific teams affected, a spokesperson said the decision followed a comprehensive review of business needs and focus areas.
“This was a difficult business decision, and we are committed to supporting the impacted employees throughout their transition,” said Amazon spokesperson Brad Glasser. The announcement was first reported by Reuters.
Slowing Growth and Cost Discipline Behind the Move
The job cuts come on the heels of a third consecutive quarterly revenue miss for AWS. In the first quarter of the year, AWS reported a 17% rise in sales to $29.27 billion, down from 18.9% growth in the previous period. Despite continued demand, the cloud business has faced mounting competition and cost scrutiny.
Amazon stated the layoffs are not directly linked to its growing investments in artificial intelligence but are part of a broader strategy to streamline operations and reallocate resources. The company emphasized that it continues to hire in other areas of AWS.
Wider Cost-Cutting Measures Continue
Amazon CEO Andy Jassy has led a cost-cutting campaign that has eliminated over 27,000 positions since 2022. The latest layoffs are part of ongoing restructuring efforts that have also impacted Amazon’s retail, devices, and communications divisions. AWS previously cut hundreds of jobs in its physical stores technology and sales and marketing units.
Jassy has signaled that changes will continue, particularly with the rise of generative AI. Last month, he told employees that AI is expected to reshape the company’s workforce needs. “We will need fewer people doing some of the jobs that are being done today,” he said, indicating a potential reduction in Amazon’s corporate workforce in the coming years.
Future Outlook for AWS and AI Integration
While AWS remains a key revenue driver for Amazon, the company is reassessing its strategic direction in the face of shifting market dynamics and new technological opportunities. Investments in AI are expected to play a growing role in Amazon’s future, requiring new skill sets and potentially displacing some traditional roles.
The latest layoffs signal Amazon’s effort to remain agile and focused as it transitions toward a more AI-driven business model. As it continues to expand capabilities in machine learning and generative AI, the company is expected to balance workforce reductions with new hiring in specialized areas.
