Amazon is undergoing a restructuring phase, leading to significant job cuts in its Amazon Web Services (AWS) unit. The tech giant announced plans to lay off employees in sales, marketing, and its physical stores technology team on Wednesday.
This decision follows Amazon’s recent announcement to discontinue its self-checkout system, Just Walk Out, from its US supermarkets. Part of the AWS unit managed the cashierless tills.
An AWS spokesperson stated, “We’ve identified a few targeted areas of the organisation we need to streamline to continue focusing our efforts on key strategic areas.” Amazon emphasized its commitment to support affected employees during their transition to new roles within or outside the company.
Despite AWS contributing 14% of Amazon’s total revenue, the division’s growth has slowed in recent years. In the last quarter of 2022, AWS revenue reached $24.20 billion, marking a 13% increase from the previous year. However, year-on-year growth was more significant in the final quarter of 2022, rising by 20%.
Concerns over economic uncertainty and cloud software spending arose during the post-pandemic period, particularly with rising interest rates worldwide. While inflation is now decreasing, AWS has yet to experience a notable acceleration in its growth rate, lagging behind competitors like Microsoft and Alphabet in cloud systems.
The majority of job losses will affect Amazon’s Seattle headquarters, with some international positions also affected. Over 27,000 jobs were cut across all areas of Amazon in 2022 and 2023, reflecting the company’s efforts to reduce extra staff hired during the pandemic.
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