Amazon (AMZN) is expected to cut up to 30,000 corporate jobs just days ahead of its Q3 earnings report on October 30. The cuts represent nearly 10% of Amazon’s corporate workforce and are expected to begin on Tuesday, according to a Reuters report. The move reflects the tech giant’s efforts to control costs amid growing focus on embracing AI. AMZN stock was up 1.3% during Monday’s regular trading session.
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The layoffs follow AMZN’s massive job-cut initiative between late 2022 and 2023, in which 27,000 positions were shed. These layoffs reflect ongoing efforts to compensate for overhiring during the pandemic boom.
The latest round targets roles across divisions, including human resources, devices and services, and operations, among others. Further, Reuters reported that managers of affected teams received training on Monday on how to communicate with employees, as email notifications are set to roll out tomorrow morning.
AI Reshaping the Workforce
Earlier this year, CEO Andy Jassy noted that Amazon’s growing investment in AI is driving the need to restructure. As AI automates more tasks, traditional roles are being phased out, while new opportunities emerge in robotics, machine learning, and cloud infrastructure.
Further, the layoffs coincide with reports that Amazon is aggressively investing in automation and AI. A New York Times report, released last week, stated that Amazon’s robotics division is working toward automating up to 75% of its fulfillment and logistics processes.
The initiative involves using advanced robots for tasks such as packaging, sorting, and moving goods, which is expected to increase efficiency and reduce costs. This move can drastically reduce the need for manual labor across warehouses and delivery networks, leading to job cuts.
AMZN to Report Q3 Earnings on October 30
The job cut reports come as Amazon prepares to report its third-quarter earnings later this week.
Currently, analysts expect AMZN to post revenue of $177.89 billion in Q3, up from $158.88 billion in the year-ago quarter. Further, the company is expected to report earnings of $1.57 per share, compared with earnings of $1.43 in the prior-year quarter.
Is Amazon a Buy, Hold, or Sell?
Turning to Wall Street, AMZN stock has a Strong Buy consensus rating based on 41 Buy ratings assigned in the last three months. At $269.03, the average Amazon stock price target implies an 18.52% upside potential.
