Amazon subsidiary Amazon Web Services (AWS) laid off hundreds of employees on Thursday. This was reported exclusively by the Reuters news agency, citing two anonymous sources. The job cuts come just one month after Amazon CEO Andrew Jassy warned that the introduction of generative AI tools would trigger job losses, according to Reuters. An Amazon spokesperson confirmed the job cuts but did not specify the number. Reuters reports that at least hundreds of jobs will be lost.
“We have made the difficult business decision to eliminate some roles in certain AWS teams,” Reuters quoted an Amazon spokesperson as saying in an email statement. “These decisions are necessary as we continue to invest, hire, and optimize resources to deliver innovation to our customers.”
In the first quarter of this year, revenues in the AWS cloud division, which is benefiting from the AI boom, rose 17 percent year-on-year to US$29.3 billion. Operating income was up 23 percent to US$11.5 billion. At the beginning of May, AWS also announced billions in investments in cloud infrastructure in Chile.
Job cuts because of and despite AI
Several AWS employees told Reuters that they had received emails on Thursday morning informing them of their dismissals and that their computers would be deactivated. Reuters writes that although it has not been able to determine the full extent of the layoffs, at least one group, known as “specialists,” has been affected by the job cuts. These are employees who work directly with customers to develop new product ideas and sell existing services. However, according to Amazon, the layoffs affect several groups within AWS, Reuters continues.
A month ago, Amazon boss Jassy wrote in an email to staff that artificial intelligence (AI) software would reduce the number of employees in the offices of the world’s largest online retailer. “We will need fewer people doing today’s jobs— – —and more people doing other types of work,” Jassy said. Numerous companies are increasingly using AI to write code for their software and are deploying AI agents to automate routine tasks. The aim is to save costs and reduce dependence on human labor.
The mass layoffs despite increased sales at AWS fit into the picture. In mid-May, Microsoft announced that it would lay off three percent of its global workforce, or around 6,000 employees. The US tech company had previously reported better-than-expected results with quarterly profits of $25.8 billion. At the beginning of July, Microsoft cut up to 9,000 jobs again. According to Microsoft, the largest wave of layoffs since 2023 is intended to “position the company for success in a dynamic market.” At the same time, Microsoft is making massive savings through the use of AI, which is also drawing criticism.
The Google group is also downsizing its internet search and advertising teams to spend more money on AI. And IT security service provider CrowdStrike is laying off five percent of its workforce – 500 employees. CEO George Kurtz cites AI-driven change as the reason for the move.
(akn)