Amazon.com Inc (AMZN: NSD) plans to shed hundreds of positions across various departments within AWS, including sales, marketing, global services, and even tech teams supporting physical stores.
Key Reason behind Layoffs:
This move comes as AWS experiences a slowdown in its once-meteoric revenue growth. The unit, a historical profit powerhouse for Amazon, witnessed its growth reach its lowest point in recent years. You might be thinking about the reasons? So, the major reason is a decrease in tech spending by businesses due to rising interest rates. Companies are tightening their belts, leading to a decline in demand for cloud services.
Trimming the Fat: A Broader Trend at Amazon
The AWS layoffs are just one piece of a larger puzzle. Since late 2022, Amazon has been on a cost-cutting spree. The company previously conducted a round of layoffs that eliminated roughly 27,000 positions across various subsidiaries like Twitch, Audible, Prime Video, and MGM Studios.
Conclusion:
The impact of these layoffs on AWS’s operations and future growth remains unclear. While the cloud computing market remains vast and brimming with potential, Amazon faces the challenge of navigating the current economic climate to retain its dominant position. Investors will be keeping a close eye on how these developments affect Amazon’s stock price.
