SAN FRANCISCO: Amazon will lay off tens of thousands of office workers as the e-commerce and technology giant cuts costs amid ramped-up investment in artificial intelligence, according to US media reports.
About 30,000 positions will be cut in an effort to tighten the belt that is expected to begin on Tuesday, multiple news outlets reported.
The reduction will represent nearly 10% of Amazon’s approximately 350,000 office jobs, but will reportedly not 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 respond AFP questions about the planned cuts reported by the Wall Street Journal, New York Times and other media, citing anonymous sources.
Amazon shares ended the formal trading day slightly higher as news of the possible cost-cutting move spread.
Amazon CEO Andy Jassy has praised AI’s potential to streamline workplace operations, from connecting with customers online to making offices more efficient.
“Our belief that AI will transform every customer experience is starting to take shape,” Jassy said during Amazon’s latest quarterly earnings call.
Amazon will report its next earnings results on Thursday and is among the tech titans under pressure to demonstrate the merit of massive investments in AI.
“AWS will be under pressure to demonstrate both revenue acceleration and operating margin improvement in light of the massive AI investments,” Emarketer chief analyst Sky Canaves said, referring to cloud computing unit Amazon Web Services.
Amazon will also likely be asked for details about a recent AWS outage.
Popular internet services ranging from streaming platforms to messaging and 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 phone 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 store.
Some banks, such as Lloyd’s, were also affected, pointing to cloud computing platform Amazon Web Services (AWS) as the source.
Amazon said it has identified the “trigger of the event” as an issue involving the Domain Name System (DNS), which acts as an Internet address book that controls data traffic.
AWS is the market leader in cloud computing, closely followed by Microsoft Azure, with Google Cloud in third place.
Businesses, governments and consumers worldwide rely on their infrastructure for online activities.
