Amazon announces major layoffs: Stock rises; focus shifts to AI

Amazon announced its second round of mass layoffs in four months. It will cut 16,000 corporate jobs. which will bring the total number of job cuts since October to about 30,000. The company employs around 1.5 million people worldwide, with 350,000 in corporate roles. Chief People Officer, Beth Galetti said the changes are meant to reduce management layers, cut bureaucracy, and improve ownership and accountability.

As a result, Amazon stock rose 0.63% to $246.22 on Wednesday. Investors see the job cuts as a sign that Amazon is controlling costs and improving efficiency. Analysts expect the company to report strong Q4 earnings on February 5. Nearly 95% of analysts rate Amazon as a “Buy,” with an average price target of $293.

The company is investing heavily in AI and cloud infrastructure. Capital expenditure reached $125 billion in 2025 and may exceed $150 billion in 2026. Free cash flow fell 69% to $14.8 billion due to high spending. Amazon Web Services' (AWS) revenue grew 20% to $33 billion in Q3, which is its fastest growth since 2022. Advertising revenue also rose 24% to $17.7 billion. The company is building its own Trainium AI chips to reduce costs and support AI workloads.

CEO Andy Jassy says the layoffs are not a sign of financial trouble. They are part of a long-term plan to make corporate teams smaller and faster after rapid growth during the pandemic. The cuts mainly affect corporate and tech jobs. Frontline fulfillment and delivery workers are mostly safe.

Amazon shares have risen from lows near $161 in April and remain above key support levels. Analysts expect Q4 revenue of $211 billion and earnings of $1.97 per share. Management hopes a leaner structure and AI investments will help the company stay competitive and drive growth in the next decade.