Amazon Web Services (AWS) has announced several hundred job cuts across sales, marketing, and tech.
The staff impacted also includes hundreds from the physical stores’ technology team, following the recent news that the e-commerce giant will be removing its ‘Just Walk Out’ self-checkout system from US stores.
The latest cuts continue the trend throughout the tech sector, which has seen over 57,000 workers laid off across 229 firms in 2024 so far.
Amazon itself has been responsible for more than 27,000 layoffs in 2022 and 2023, with over-hiring during the pandemic and a focus on AI and automation considered to be the key factors.
In explaining why AWS had decided to make the staff cuts, a spokesperson stated: “We’ve identified a few targeted areas of the organization we need to streamline.
These decisions are difficult but necessary as we continue to invest, hire, and optimize resources to deliver innovation for our customers.
Despite the news, the company also confirmed that “it will continue to hire and grow, especially in core areas of our business.”
The Information – the news site that first broke the news – believes that the cuts are part of Sales Chief Matt Garman’s plans for a broader reorganization.
While AWS has recovered somewhat from last year’s slow growth, the company is still under threat of losing its position as the biggest cloud provider in the world, with Microsoft’s partnership with OpenAI making it the early front-runner in the GenAI race.
As tech firms continue to look to AI as the next big cash cow, what does the future hold for their employees?
Does More AI = Less Staff?
Despite companies that deploy automation and AI tools constantly reassuring their staff and the public that these solutions are there to assist employees, not replace them, lay offs continue to be commonplace.
To draw a soccer analogy, it’s like when a struggling manager gets the public backing of the board – almost a guarantee that they’ll be fired within the month.
Thankfully, some enterprise tech providers are taking steps to address the issue, with Cisco, Google, and Microsoft among the names included in the new “AI-Enabled ICT Workforce Consortium”.
The consortium aims to identify the IT roles most affected by AI, facilitate access to relevant upskill/reskill training, and connect skilled workers with possible employers.
Such efforts are significant, with AWS far from the only tech vendor to make layoffs – with Cisco, Google, and Microsoft all cutting staff in 2023.
Elsewhere, CPaaS giant Twilio launched three rounds of layoffs in 18 months, and Talkdesk did the same over a 14-month period.
Salesforce also recently announced that it was laying off 700 employees, having already let go ten percent of its staff the previous year.
Yet, some will worry that the tech these companies are building could spread the layoff phenomena far beyond the tech sector.
For instance, following Klarna’s recent partnership with OpenAI, it reported that its tech is responsible for two-thirds of customer service chats and is completing the work of 700 employees.
However, Gartner has warned businesses against pursuing digital-only solutions – predicting that the EU could make “the right to talk to a human” a part of its consumer protection laws by 2028.
