Amazon (AMZN, Financial) has announced layoffs affecting hundreds of employees within its Amazon Web Services (AWS) division. This move aligns with CEO Andy Jassy's earlier hints about workforce reductions due to the integration of generative artificial intelligence (AI). An Amazon spokesperson confirmed the layoffs, although exact numbers weren't revealed. The affected roles mainly belong to AWS's "Specialists" team, responsible for helping clients develop new products and promoting services.
Some employees reported receiving termination emails and losing access to their work computers. According to Amazon, these layoffs are part of strategic business decisions aimed at optimizing resources while continually investing and recruiting, thereby delivering innovative outcomes for customers.
AWS, Amazon's profit-driving segment, reported a 17% increase in sales, reaching $29.3 billion in the first quarter, with operating income rising 23% to $11.5 billion. Despite the growth, the adoption of AI tools, which can replace tasks formerly handled by humans, has pushed Amazon and other tech giants to reduce labor costs.
As of March, Amazon employed 1.6 million full-time and part-time workers globally. This year, several tech companies, including Microsoft (MSFT), Meta (META), and CrowdStrike (CRWD), have also announced layoffs.
