Amazon just posted its third quarter earnings and it turns out it was a great quarter for the e-commerce giant, despite the recent loffs.
The food giant posted $180.2 billion in sales in the three months ended September 30, up 13% from the same period last year. Its cloud business, AWS, reported its biggest annual growth since 2022, up 20% to $33 billion. The company’s stock jumped 13% in after-hours trading following the report.
So, why, the company is doing so well, did Amazon just lay off 14,000 jobs and hint that more cuts could be on the way?
Fortunately for us, CEO Andy Jassy was asked to comment on the layoffs when contacted Thursday evening. However, he was quick to discount any AI interaction.
“What I can tell you is, you know, the announcement we made a few days ago was not financially sustainable, and it’s not even very AI driven,” Jassy told investors. “It’s a tradition.”
He went on to try to make the case that the company’s rapid growth over the past several years has added too many people, layers and difficulties to its operations. This rapid growth, in turn, reduced decision-making and weak ownership of employees in key areas.
Jassy said that I am now committed to working as the largest startup in the world to move quickly through what he called “the technological transformation that will happen now.”
A memo sent to affected employees earlier this week hit many of the same points Jassy made. But he also specifically named the Big Tech Shift, AI, that he was aware of, just as he wanted it not to drive around layoffs.
“This generation of AI is the most revolutionary technology that we have seen since the Internet, and it empowers companies that are more advanced than ever (in several market segments, to deliver as quickly as possible to our customers and texts, to deliver as quickly as possible to our customers and Amazon’s experience and technology in Amazon, in MEMO.
However, these job cuts also come as Amazon, and it seems like the rest of Silicon Valley, seems to bet everything on Ayi.
Jassy said Thursday that the company’s AI and Cloud infrastructure is expected to have the highest power levels in the past 12 months and is expected to add another gigawatt for the fourth quarter.
And the coming cuts may not be limited to corporate employees. The New York Times reported last week that Amazon’s automation group expects that by 2027, the company can avoid hiring more than 160,000 US workers that they would need. Overall, Amazon’s robotics team has the ultimate goal of replacing 75 percent of the company’s operations, according to internal documents obtained by The New York Times.
