Amazon lays off hundreds of employees in its AWS cloud computing unit

Amazon has laid off staff in its Amazon’s cloud computing unit, AWS.  In an announcement on Wednesday, the company confirmed the job cuts affected several hundred employees from its physical stores technology and sales and marketing departments. The retail giant added that the  ove is to optimize focus on strategic objectives and refine operations for maximum impact.

The news of the layoff comes just a day after Amazon announced the expansion of its free credits program for startups to use top AI models. The program included the expenses associated with utilizing major AI models in a strategic move aimed at fortifying its foothold in the startup ecosystem

In a statement, an AWS spokesperson said, “We’ve identified a few targeted areas of the organization we need to streamline in order to continue focusing our efforts on the key strategic areas that we believe will deliver maximum impact. We didn’t make these decisions lightly, and we’re committed to supporting the employees throughout their transition to new roles in and outside of Amazon.” The news was first reported by GeekWire.

To support affected employees, Amazon said that those in the U.S. will receive pay and benefits for at least 60 days, in addition to eligibility for a severance package.

While AWS remains a profitable entity, recent quarters have witnessed a deceleration in sales growth attributed to companies trimming their cloud expenditures amidst rising interest rates, CNBC reported. However, Amazon executives expressed optimism in February, noting signs of market reacceleration.

The reduction in AWS’ store technology team coincides with Amazon’s decision to phase out cashierless checkout systems from its U.S. Fresh stores. This team oversees innovations such as the Just Walk Out technology, Dash smart carts, and Amazon One palm-based payment system. Notably, the store technology division transitioned from Amazon’s retail group to its cloud computing arm in 2022.

Explaining the rationale behind the cuts, the AWS spokesperson cited a strategic shift in the utilization of applications within Amazon-owned and third-party stores.

Amazon’s streamlining efforts extend beyond this instance, with a series of layoffs spanning over a year. Commencing at the end of 2022 and continuing through 2023, the company initiated its largest layoff wave, affecting over 27,000 positions across nearly all sectors. Notably, this year has witnessed layoffs in various units, including Twitch, Audible, Buy with Prime, and Prime Video and MGM Studios.