Amazon is poised to eliminate approximately 30,000 office positions as part of a broader strategy to cut costs. This decision comes as the e-commerce and technology giant intensifies its investments in artificial intelligence, according to various reports from U.S. media outlets.
The layoffs, which are expected to commence on Tuesday, will account for nearly 10% of Amazon”s office workforce of around 350,000 employees. Importantly, these reductions will not extend to the company”s distribution and warehouse staff, who represent the majority of Amazon”s workforce exceeding 1.5 million.
While Amazon did not respond to inquiries from AFP regarding these layoffs, the news has been reported by prominent sources such as the Wall Street Journal and the New York Times, citing anonymous insiders.
As the news of the impending job cuts circulated, Amazon”s stock saw a slight increase by the end of the trading day. CEO Andy Jassy has frequently emphasized the potential of artificial intelligence to enhance operational efficiencies, from customer interactions to improving workplace productivity. “Our conviction that AI will change every customer experience is starting to play out,” Jassy stated during the last quarterly earnings call.
Amazon is scheduled to release its next earnings report on Thursday and faces mounting pressure from investors and analysts to demonstrate the value of its significant investments in AI technology. Sky Canaves, principal analyst at Emarketer, indicated that Amazon Web Services (AWS) is under scrutiny to showcase both revenue growth and improved operating margins amid these massive AI expenditures.
The company is also likely to address a recent outage affecting AWS, which disrupted various internet services, including streaming platforms and messaging applications. This downtime highlighted the critical reliance of many online operations on Amazon”s cloud infrastructure. Services impacted included Amazon”s own Prime Video, alongside major platforms like Disney+, Airbnb, and others. Reports indicated that users encountered difficulties with mobile services and messaging apps, particularly in Europe.
According to Amazon, the outage was triggered by an issue related to the Domain Name System (DNS), which serves as a directory for internet traffic. AWS maintains its position as a leader in the cloud computing sector, closely followed by Microsoft Azure and Google Cloud.
