Amazon Announces Layoffs in Cloud Computing Unit

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Amazon’s cloud computing division, Amazon Web Services (AWS), has announced significant layoffs affecting hundreds of employees in its physical stores technology, sales, and marketing units. The move comes as part of the company’s effort to streamline operations and refocus efforts on key strategic areas.

In a statement, an AWS spokesperson confirmed the decision, stating, “We’ve identified a few targeted areas of the organisation we need to streamline to continue focusing our efforts on the key strategic areas that we believe will deliver maximum impact.” The company emphasised its commitment to supporting affected employees through their transition to new roles, both within and outside of Amazon.

The cuts in AWS’ store technology team coincide with Amazon’s recent decision to remove cashierless checkout systems from its U.S. Fresh stores. The store technology team, responsible for innovations such as ‘Just Walk Out’ and ‘Amazon One’ palm-based payment technology, was integrated into AWS in 2022.

While AWS has historically been a significant revenue driver for Amazon, recent quarters have seen a deceleration in sales growth as companies scaled back their cloud spending amid changing economic conditions. This shift in market dynamics has prompted Amazon to make strategic adjustments to its operations.

The layoffs come as part of a broader trend of restructuring within Amazon, which has seen mass layoffs over the past year, affecting various business units including Twitch, Audible, Buy with Prime, Prime Video, and MGM Studios. Despite the layoffs, Amazon has pledged to continue supporting affected employees with severance packages and benefits for at least 60 days.

As Amazon navigates ongoing changes in the market landscape, the company remains committed to optimising its operations and driving long-term growth in key areas of its business, including cloud computing through AWS.