Amazon cuts deep: largest layoffs in company's history hit cloud computing, ad teams
Amazon
E-commerce company Amazon began laying off employees in its human resource and cloud computing divisions on Wednesday as part of the previously announced job cuts that will affect 9,000 people.
According to CNBC, the layoffs affecttwo of Amazon's most profitable businesses, Amazon Web Services (AWS) and advertising. Both businesses have experienced stagnationin recent months as companies trim their spending amid the challenging economic environment.
Some teams within AWS were also part of an earlier round of layoffs. Moreover, some job cuts are also expected in AWS's professional services division, which helps customers troubleshoot issues with their cloud infrastructure.
No business division is safe
In recent weeks, it has also laid off people in its video games and Twitch livestreaming divisions. When combined with the cuts made earlier this month, it represents the greatest layoffs in Amazon's 29-year history.
Amazonhas been cutting costs to prepare for an economic slowdown and slower growth in its main retail division. This includes halting corporate recruiting, cancelling experimental projects, and limiting warehouse expansion.
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According to media reports, Amazon has also discontinued the Halo Band, Halo View, and Halo Rise devices and its Halo division.
The company announced that Amazon Halo devices and the Halo app will cease to work from August 1. For the employees affected by this decision, the company has offered packages that include a separation payment, transitional health insurance benefits, and external job placement assistance.
The Covid-19 pandemic led to a significant boost in AWS' headcountas companies, government agencies, and schools transitioned to the cloud network.
However, giventhe uncertainbusiness and macroeconomic climate in 2023, AWS CEOAdamSelipsky wrote in a memo that the companymust focus on identifying and putting its resources behind its top priorities — "those things that matter most to customers and will move the needle for the business."
Despite the layoffs, Amazon's shares surged over 3 percentin afternoon trading on Wednesday. Investors will keenly watch whether the company'scost-cutting efforts have improved profitability, when Amazon reports first-quarter earnings after the bell on Thursday.