E-commerce giant Amazon has announced the slash of hundreds of jobs in its cloud computing unit.
The company disclosed that the job cuts were necessitated after identifying a few targeted areas within the organization, to streamline and focus efforts on key strategic areas that it believes will deliver maximum impact.
Amazon said,
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“We’ve identified a few targeted areas of the organization we need to streamline in order to continue focusing our efforts on the key strategic areas that we believe will deliver maximum impact. We didn’t make these decisions lightly, and we are committed to supporting the employees throughout their transition to new roles in and outside of Amazon”.
Notably, employees in the U.S. will continue to receive their pay and benefits for at least 60 days, and they will also be eligible for a severance package.
Amazon’s recent layoff is coming after the lucrative AWS unit has seen its sales growth decelerate in recent quarters, as companies trimmed their cloud spend amid rising interest rates.
The cuts to AWS’ store technology team come after Amazon said it would remove cashierless checkout systems in its U.S. Fresh stores. The AWS unit includes teams overseeing the cashierless tech, called Just Walk Out, as well as, its Dash smart carts and Amazon One palm-based payment technology.
Amazon’s AWS spokesperson said the company decided to make cuts to the store technology division “as a result of a broader strategic shift in the use of some applications in Amazon’s own as well as in third-party stores.
Recall in February 2023, Amazon alongside market leaders for cloud-based storage and servers, all reported a decline in revenue in their respective businesses. Amazon which pioneered the market over 15 years ago and maintains a commanding lead, said AWS revenue growth decelerated to 20% from 27%
Amazon Web Services and Google Cloud, which also includes Workplace productivity software, showed revenue for the fourth quarter that was below analysts’ estimates. However, Amazon executives expressed optimism when they said the market is starting to show signs of a reacceleration.
With the recent job cuts in its cloud computing unit, Amazon is extending its year-long campaign to reduce costs. The e-commerce giant has been reducing its workforce for over a year, implementing significant layoffs.
Starting at the end of 2022 and extending through 2023, Amazon undertook its largest layoff campaign to date, resulting in the termination of over 27,000 jobs.
As the company looks ahead with a focus on high-priority areas, it expects these optimization efforts to be a headwind to its growth.