Amazon announced massive job layoffs in its cloud computing section, Amazon Web Services (AWS) on Wednesday. The workforce cutbacks affect hundreds of employees in the firm's physical retail, IT, and sales and marketing groups.
AWS spokespersons said the layoffs are part of a strategic plan to simplify operations and concentrate important areas for the greatest effect. Amazon pledged to help affected employees find new jobs inside and outside the firm.
"We didn't make these decisions lightly, and we're committed to supporting the employees throughout their transition to new roles in and outside of Amazon," said the AWS representative, according to a CNBC report.
Amazon's profitable AWS segment has seen sales growth decelerate in recent quarters due to clients cutting cloud expenditures due to rising interest rates. Even still, Amazon executives were optimistic about market reacceleration in February.
AWS' retail technology team layoffs coincide with Amazon's U.S. Fresh Shops' cashierless checkout ban. This team manages cashierless, smart cart, and palm-based payment technologies. In 2022, Amazon's retail department merged store technology into cloud computing.
According to the AWS spokesman, downsizing the store technology group reflects a deliberate shift in application usage in Amazon-owned and third-party stores.
The massive tech layoffs at the end of 2022 and continuing into 2023, affecting over 27,000 positions across several firms, contribute to Amazon's ongoing personnel reduction initiatives. This year, Amazon has laid off employees from Twitch, Audible, Buy with Prime, Prime Video, and MGM Studios.
Attendees walk through an expo hall during AWS re:Invent 2022, a conference hosted by Amazon Web Services, at The Venetian Las Vegas on November 29, 2022 in Las Vegas, Nevada. (Photo : Noah Berger/Getty Images for Amazon Web Services)
Amazon Free Credits Program Update
The latest Amazon layoffs came after AWS announced that it had increased its startup-free credits program to cover key AI model expenditures. This growth is reflected in AWS's Bedrock AI platform market share plan. Anthropic, Meta, Mistral AI, and Cohere models are now available to startups using cloud credits.
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According to Howard Wright, AWS vice president and worldwide head of startups, the change aims to help the startup environment and encourage them to use AWS. He stressed the necessity of offering entrepreneurs several options and security.
Amazon's recent additional $2.75 billion investment in Anthropic brought its total investment to $4 billion. Anthropic, a popular Bedrock model, will use AWS as its primary cloud provider. This collaboration builds and trains models based on Trainium and Inferentia chips. Because of their long-term commitment, AWS users globally can access future generations of Anthropic's foundation models on Amazon Bedrock.
Wright said Amazon's free credits will boost Anthropic's income, demonstrating its ecosystem-building efforts. AWS has given companies over $6 billion in credits in the previous decade, showing its commitment to aiding startups.
Just Walk Out Discontinued
In another development, Amazon announced a change in strategy in its checkout-free "Just Walk Out" outlets. The company has abandoned the revolutionary idea of using cameras and sensors to track client transactions.
Amazon is replacing Just Walk Out with Dash Carts, which include scanners and displays to let consumers check out while they purchase. This change intends to improve shopping reliability and ease compared to the checkout-less approach. Amazon Fresh locations will also provide self-checkout for non-members, as TechTimes reported.
Amazon's senior VP of grocery shops, Tony Hoggett, confirmed that Dash Carts will replace Just Walkout in select locations.
Just Walk Out, launched in 2016, revolutionized grocery shopping by eliminating checkout queues. The technology experienced delays in receipt generation, as well as the high expense of maintaining each store's complex scanner and camera equipment. Although promising, Just Walk Out fell short of Amazon's expectations.
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