Tech giant Amazon (AMZN) has confirmed that it is laying off some employees in its Amazon Web Services (AWS) cloud computing division. The decision was made after a review of the company’s structure and priorities, with spokesperson Brad Glasser stating that it was a “difficult business decision” but necessary to focus on the areas that matter the most going forward. Reuters was the first to report the news of these layoffs.
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While Amazon didn’t disclose which specific AWS teams were affected or how many employees were impacted, Glasser stated that the company will help those employees through the transition. Interestingly, the company explained that these cuts are not mainly due to investments in artificial intelligence. Instead, they are part of Amazon’s plan to streamline its workforce and concentrate resources where they’re most needed. In fact, AWS will continue to hire in key areas even as some roles are being eliminated.
The layoffs also come shortly after AWS reported a third straight quarter of slower revenue growth. In the first quarter, AWS brought in $29.27 billion in sales, which was up 17%, but slightly down from the 18.9% growth in the prior period. As a result, Amazon has laid off more than 27,000 employees across the company since 2022. In addition, CEO Andy Jassy recently told employees that generative AI could lead to further reductions in Amazon’s corporate workforce, as some jobs become automated while new roles are created to meet the changing needs.
What Is the Price Target for AMZN Stock?
Turning to Wall Street, analysts have a Strong Buy consensus rating on Amazon stock based on 44 Buys and one Hold assigned in the past three months. Furthermore, the average AMZN stock price target of $251.44 per share implies 12.3% upside potential from current levels.
