Amazon’s Strategic Pivot Job Cuts: Amazon (NASDAQ:AMZN), the e-commerce and cloud computing giant, is strategically cutting costs amidst a challenging macro environment, announcing the layoff of over 180 employees in its Games division, following a previous round of 100 job cuts in April. Christoph Hartmann, Vice President of Amazon Games, conveyed in an email on Monday that the company’s focus is shifting toward high-growth potential businesses. Despite a remarkable 70% surge in Amazon’s stock price year-to-date, these cost-cutting measures are part of the ongoing restructuring efforts.
As a part of this restructuring, Amazon will discontinue its Game Growth initiative, which assists game developers in marketing their titles. Additionally, the Crown channel, streaming on Twitch, will be closed. Hartmann emphasized the redirection of attention to upcoming launches like Throne and Liberty, Blue Protocol, and future titles such as Tomb Raider and The Lord of the Rings.
Amazon’s continuous efforts to streamline and reduce headcount are responses to both macroeconomic pressures and fierce competition. Recent reports suggest a reduction in the workforce in the streaming music and podcast unit, and roles have been cut in the human resources unit, People Experience and Technology. Over the past year, Amazon has reportedly laid off around 27,000 employees.
The cost reduction and streamlining initiatives are proving effective, evident in the Q3 2023 results. Amazon’s operating margin saw a substantial improvement, rising to 7.8% from 2% in the prior-year quarter. The company’s earnings per share (EPS) soared by an impressive 236%, reaching $0.94, attributed to robust revenue and enhanced margins.
Analysts continue to view Amazon favorably, given its dominance in e-commerce and cloud computing, coupled with growth potential in areas like advertising. Wall Street maintains a Strong Buy consensus rating, with 40 unanimous Buy recommendations. The average price target of $175.51 implies a promising 23% upside potential.
Also read: Sustainable energy buyer: Amazons Remarkable Journey
Our Reader’s Queries
Why is Amazon cutting so many employees?
In a move that shocked many, Amazon recently let go of 18,000 employees – the biggest job cut in the company’s history. The majority of the layoffs were concentrated in Amazon Stores and People Experience and Technology Solutions divisions. CEO Andy Jassy attributed the decision to the current economic climate and the company’s rapid hiring. Despite the unfortunate news, Amazon remains a major player in the industry and is sure to bounce back from this setback.
How many jobs have Amazon cut?
Amazon’s voice assistant products, based in Seattle, are in direct competition with Alphabet (GOOGL. O) and Apple (AAPL. O). The company has undergone a significant reduction in workforce, with over 27,000 jobs cut in the past year. This trend is part of a larger wave of tech layoffs in the U.S. following a period of heavy hiring during the pandemic.
Is Amazon laying off another 9000 employees?
In a shocking announcement, Amazon CEO Andy Jassy revealed that the company will be letting go of 9,000 more employees. This comes as a surprise, as the e-commerce giant had already cut 18,000 positions earlier this year. The news has left many wondering about the future of the company and the impact it will have on the affected employees. Sindhu Sundar has the full story.
Did Amazon cut hundreds of jobs in Alexa division?
According to CNBC, Amazon has started laying off “several hundred” employees in its Alexa division as part of its cost-cutting measures. It’s worth mentioning that these job cuts are in addition to the 27,000 positions that Amazon has already eliminated since November 2022.