Amazon's Double Play: Layoffs in AWS Amid AI Cost Surge and Oracle Partnership Boost

As of last week, Amazon (AMZN) shares rose by 1.01%, marking a two-day rally with a 1.32% increase over these days. Over the past week, the increase was 0.49%, contributing to a year-to-date rise of 3.07%, situating its market capitalization at $2.4006 trillion.

Amazon is undergoing staff reductions within its cloud computing division, AWS, amid rising artificial intelligence (AI) costs, making it another major tech company to announce layoffs recently. This was confirmed by Amazon spokesperson Brad Glasser on Thursday, who indicated that multiple teams within AWS are affected by the layoffs.

Glasser noted in an email statement that following a thorough review of their organization, priorities, and future focus areas, difficult business decisions had to be made, resulting in the reduction of some positions within certain AWS teams. He emphasized that these decisions were made with careful consideration and are seen as essential for continuing to invest, hire, and optimize resources to innovate for customers.

Amazon’s CEO, Andy Jassy, had mentioned in June that the company anticipates a reduction in its workforce over the coming years as AI increasingly automates more tasks. Insiders have reported that the current layoffs will affect several hundred positions, though Amazon declines to specify the exact number.

Amazon ranks as the second-largest private employer in the U.S., following Walmart, with 1.56 million employees as of the end of March. While a significant number of these employees are tasked with warehouse roles involving packaging and shipping, over 350,000 are engaged in corporate roles.

In a recent development, Amazon Web Services announced a partnership with Oracle to roll out Oracle Database@Amazon Web Services, which is now available. This service allows clients to operate Oracle Exadata Database Service and Oracle Autonomous Database on the Oracle Cloud Infrastructure within Amazon's cloud offering.

This collaboration simplifies the migration of Oracle database workloads to Amazon's OCI platform, facilitating the use of Oracle Real Application Clusters (RAC) and the latest Oracle Database 23c featuring integrated AI functionalities. The Zero-ETL integration feature streamlines data integration between Oracle database services and Amazon’s analytic services, providing seamless data flow and enhanced applications performance.

The newly launched service is currently available in Amazon Web Services' U.S. East (Northern Virginia) and U.S. West (Oregon) regions, with plans to expand into 20 additional AWS regions globally. This move is set to broaden the options for customers running databases in the cloud and complements the existing options for Oracle database workloads housed within Amazon's cloud infrastructure.