A report by the New York Times late Monday stated that Amazon (NASDAQ: AMZN) is set to lay off around 10,000 employees this week.
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Citing sources, the report revealed that the tech giant will let go of workers in its corporate and technology units, with the cuts focused on its retail, devices, and human resources departments.
The cuts are significant, representing the company’s largest in its history, although the total number still remains fluid, according to the article.
Tech companies across the board have announced layoffs, with the likes of Twitter and Meta Platforms recently letting go of staff in order to cut costs amid a challenging economic environment.
Following the report, JMP Securities analyst Nicholas Jones maintained an Outperform rating and $140 price target on Amazon but told investors in a research memo that the layoff news is “not surprising.”
More specifically, the analyst wrote that he is “not surprised by the announcement given last week’s news of Amazon reviewing cost-cutting options aimed at unprofitable areas of the company.” He added that rising capital costs and weakening consumer goods sales have pressured Amazon’s e-commerce business, while AWS has experienced softness.
It makes sense to Jones that Amazon would aim to improve margins as investors become more focused on profits and free cash flow.
Amazon shares closed Monday’s session down 2.28%.