Technology giant Amazon has announced job cuts affecting hundreds of staff at its cloud computing business.
Amazon Web Services (AWS) has been growing and now represents 14% of Amazon's total revenue, according to its latest financial report. The company has been shifting its strategy with physical stores, Amazon Fresh, which were launched in 2020.
On Tuesday, it said it would remove its self-checkout system called Just Walk Out from all the stores. The firm said the latest job cuts impact several hundred roles in sales, marketing and global services and a few hundred roles in its physical stores technology team.
“These decisions are difficult but necessary as we continue to invest, hire, and optimize resources to deliver innovation for our customers”, an AWS spokesperson told the BBC.
The firm also said “it will continue to hire and grow, especially in core areas of our business”, adding that there are thousands of jobs available and it is working to find internal opportunities for employees whose roles are affected.
Amazon said the cuts will be at its operations around the world, though the majority of AWS roles are in its home city Seattle. The company said US-based employees will receive pay and benefits for at least 60 days, help finding another job and access to transitional health benefits. They will also be eligible for a severance pay.
As of the end of last year Amazon had a total of more than 1.5 million full-time and part-time employees, excluding contractors and temporary personnel.
Amazon has been focusing on artificial intelligence (AI) through AWS, including investing in safety and research start-up, Anthropic, last month.
Technology giants, including Microsoft which has invested in ChatGPT, are competing to develop their AI capabilities. In January, Amazon axed hundreds of jobs across its subsidiaries Twitch, Prime Video and MGM studios. More than 500 Twitch employees – a third of the streamer's workforce – were laid off.
According to US career consultancy Challenger, Gray & Christmas, the tech sector cut 168,032 jobs in 2023 – up 73% compared to 2022.
