Online sales accounted for $220 billion of its $513 billion in total revenue last year, and with consumers struggling right now, that's not the best place to be. Cutting costs in the form of layoffs will likely move the company forward on that front.īut Amazon is still very much an e-commerce company. Put simply, in this economic environment, any move that will make Amazon more profitable will likely be well received by investors, especially after the company delivered its first annual net loss since 2014 last year (although under extenuating circumstances). The flagship website attracts 2.2 billion visits a month, so it's an ideal place for merchants to market their products.Īmazon CEO Andy Jassy said the recent layoffs were part of a plan to make the company leaner, while still being able to invest in the areas of its business that will improve customers' lives, as well as Amazon as a whole. In any case, advertising remains one of the more promising segments of Amazon's business.
It's possible job cuts in this department are targeted toward experimental projects or those that aren't expanding as quickly overall. On the advertising front, that segment has continued to show steady growth with a 23% revenue increase in the fourth quarter, even in the face of this tough economy. The job cuts at AWS suggest perhaps the company is preparing for even slower growth in upcoming quarters, so it's managing costs to maintain profitability. It's also Amazon's main source of operating profit.īut its revenue grew by just 20% in the fourth quarter of 2022, which was not only a slower rate than both its key rivals Microsoft Azure and Alphabet's Google Cloud, but it was also half the growth rate it achieved in the year-ago period. It helps its business customers with their digital transformations by offering hundreds of solutions, from simple data storage to advanced machine learning applications.
AWS is Amazon's industry-leading cloud services segment.
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