Amazon will lay off tens of thousands of office workers as the e-commerce and tech giant trims costs amid ramped-up investments in artificial intelligence, according to US media reports.
Some 30,000 positions will be cut in a belt-tightening move expected to begin on Tuesday, multiple news outlets reported.
The reduction will represent nearly 10 percent of the approximately 350,000 office jobs at Amazon but is reported not to affect the distribution and warehouse workforce that makes up the majority of the company’s more than 1.5 million employees.
Seattle-based Amazon did not reply to AFP queries regarding the planned cuts reported by the Wall Street Journal, New York Times, and other outlets, citing anonymous sources.
Amazon shares ended the formal trading day up slightly as word of the potential cost-cutting move spread.
Amazon chief executive Andy Jassy has lauded the potential of AI to streamline workplace operations, from engaging with customers online to making offices more efficient.
“Our conviction that AI will change every customer experience is starting to play out,” Jassy said during Amazon’s last quarterly earnings call.
Amazon will next report earnings on Thursday, and is among the tech titans under pressure to show the merit of huge investments in AI.
“AWS will be under pressure to both show revenue acceleration and operating margin improvement in light of its massive AI investments,” Emarketer principal analyst Sky Canaves said, referring to Amazon Web Services’ cloud computing unit.
Amazon will also likely be pressed for details about a recent AWS outage.
Popular internet services ranging from streaming platforms to messaging services to banking were offline for hours last week due to an outage in Amazon’s crucial cloud network, illustrating the extent to which internet life depends on the tech titan.
The disruption affected streaming platforms, including Amazon’s Prime Video service and Disney+, as well as Perplexity AI, the Fortnite game, Airbnb, Snapchat, and Duolingo.
Mobile telephone services and messaging apps Signal and WhatsApp were affected in Europe, according to Downdetector.
People also reported problems reaching websites, including Amazon’s own e-commerce shop.
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Some banks, such as Lloyd’s, were also impacted, and pointed to Amazon Web Services (AWS) cloud computing platform as the source.
Amazon said it identified the “trigger of the event” as an issue involving the Domain Name System (DNS), which acts as an internet address book directing data traffic.
AWS leads the cloud computing market, followed closely by Microsoft Azure, with Google Cloud in third place.
Businesses, governments, and consumers worldwide rely on their infrastructure for online activities.
AFP