Amazon Cuts AWS Jobs Amid Rising AI Costs, Revenue Slowdown

Amazon has announced further job cuts, this time focusing on its cloud computing division, Amazon Web Services (AWS). The company confirmed the layoffs, which are expected to impact several teams within AWS, although specific details on the number of employees and the teams affected were not disclosed. This latest round of layoffs is part of Amazon's broader strategy to streamline its workforce and prioritize core business areas, rather than a direct consequence of its investments in artificial intelligence (AI).

These layoffs come as Amazon grapples with rising costs associated with AI development. The company has been under pressure to reduce expenses and enhance operational efficiency across its operations. Despite the job cuts, Amazon has indicated that it will continue to hire in certain areas within AWS, signaling ongoing investment in key growth sectors.

The decision to reduce the workforce was made following a thorough review of the organization's structure, priorities, and future needs. Amazon has pledged to support affected employees throughout the transition process. The company has been implementing cost-cutting measures for several years, with over 27,000 employees having been laid off since 2022. While the current round of layoffs is smaller in scale compared to previous years, it still underscores Amazon's commitment to optimizing its workforce and focusing on strategic initiatives.

AWS, a major contributor to Amazon's profitability, has experienced a slowdown in revenue growth in recent quarters. The company reported that AWS revenue grew by 17% in the first quarter, reaching $29.27 billion, but this was below the previous quarter's growth rate of 18.9%. The layoffs are part of a broader strategy to improve operational efficiency and ensure that AWS remains competitive in the rapidly evolving cloud computing market.