Amazon Stock Dips as Jobs Cuts in Devices Division Announced

Amazon's stock (NASDAQ: AMZN) is trading down 1.36% through this morning's pre-market session, as the company announced the layoff of 100 employees in its devices and services division. This move reflects the ongoing trend of targeted job cuts within the tech industry, driven by the expansion of artificial intelligence (AI) and the impact of U.S. tariffs.

Amazon's decision follows recent layoffs by Microsoft Corporation, which affected approximately 6,000 workers, accounting for around 3% of its global workforce. Both companies are adjusting their workforce to better align with evolving market conditions and technological advancements.

In the past, Amazon has made similar cuts in its devices division. Previous layoffs in 2022 and 2023 impacted teams working on products like the Kindle, Echo, Alexa, and Zoox autonomous vehicles. Despite the workforce reductions, Amazon continues to innovate. It recently introduced generative AI capabilities to its Alexa digital assistant, enhancing its functionality and customer experience.

The company stated that these job cuts are designed to improve the efficiency of its teams and programs, ensuring alignment with its strategic product roadmap. This restructuring effort aims to maintain competitiveness in a rapidly changing technological landscape.

The impact of these layoffs is reflected in consumer sentiment; retail sentiment regarding Amazon has shifted from ‘bullish' to ‘neutral.' Notably, despite the job cuts, Amazon has added around 4,000 jobs from the fourth quarter of last year to the first quarter of this year.

However, this has not entirely counteracted the challenges facing the company. Amazon's stock was down by 4.5% year to date leading into today, indicating that markets are cautiously watching how the company navigates these changes.