BBC reports that Amazon, the technology behemoth, has declared job cuts affecting hundreds of workers in its cloud computing division.
Amazon Web Services (AWS) has seen significant growth, now constituting 14 percent of Amazon’s total revenue as per its recent financial statement.
The company has altered its approach with physical stores like Amazon Fresh, introduced in 2020. On Tuesday, it announced the removal of its self-checkout system, Just Walk Out, from all stores.
The job cuts predominantly affect roles in sales, marketing, global services, and the physical stores technology team, amounting to several hundred positions.
An AWS spokesperson stated to BBC, “These decisions are tough but necessary as we continue to invest, hire, and optimize resources to deliver innovation for our customers.”
Amazon assured that it will keep hiring and expanding, particularly in core business areas, offering thousands of job opportunities and internal transitions for affected employees.
While the majority of AWS roles are in Seattle, the cuts will impact operations globally. US-based employees will receive pay and benefits for at least 60 days, assistance in job placement, transitional health benefits, and severance pay.
As of last year, Amazon boasted over 1.5 million full-time and part-time employees, excluding contractors and temporary workers.
Amazon has been emphasizing artificial intelligence (AI) development via AWS, including recent investments in safety and research startup Anthropic.
Rivals like Microsoft, which has invested in ChatGPT, are also intensifying their AI endeavors.
In January, Amazon axed hundreds of jobs in subsidiaries Twitch, Prime Video, and MGM studios. Twitch alone witnessed over 500 layoffs, comprising a third of its workforce.
According to US career consultancy Challenger, Gray & Christmas, the tech sector saw a significant increase in job cuts in 2023, totaling 168,032, a 73 percent rise compared to 2022.