More layoffs: Is AI the reason for Amazon jobs cuts in cloud computing?

Amazon, the tech giant, has announced significant job cuts affecting hundreds of employees in its cloud computing business, Amazon Web Services (AWS), as well as its physical stores technology team.

According to Amazon's latest financial report, AWS has been a substantial contributor to the company's revenue, comprising 14% of its total earnings.

However, amidst ongoing transformations within the company's business strategies, adjustments have become inevitable.

Amazon to remove self-checkout system

On Tuesday, Amazon revealed plans to remove its self-checkout system, known as Just Walk Out, from all its physical stores.

This decision accompanies the announcement of job reductions impacting several hundred roles in sales, marketing, and global services, as well as a few hundred positions within its physical stores' technology team.

Layoff to impact global offices too

While the majority of AWS roles are based in Seattle, Amazon clarified that the job cuts will affect operations globally.

In response to the layoffs, affected US-based employees will receive pay and benefits for at least 60 days, assistance in finding alternative employment, access to transitional health benefits, and eligibility for severance pay.

Is AI the reason for job cuts?

Amazon's workforce reduction follows its recent focus on artificial intelligence (AI) development through AWS, including investments in safety and research startups like Anthropic.

The move underscores the intensifying competition among technology giants, with players like Microsoft, which has made significant investments in AI, also vying to enhance their capabilities in this domain.

This announcement comes on the heels of a series of job cuts across Amazon subsidiaries, including Twitch, Prime Video, and MGM studios.

In January, Amazon terminated hundreds of positions, with over 500 Twitch employees being laid off, constituting a third of the streaming platform's workforce.

The tech sector at large has witnessed a surge in job cuts, with data from US career consultancy Challenger, Gray & Christmas revealing a 73% increase in tech sector job reductions in 2023 compared to the previous year, amounting to a total of 168,032 job losses.