Amazon lays off another 9,000 employees and has begun testing GPT-like tools internally

The U.S. tech giant is experiencing a second round of massive layoffs. Following Meta's announcement last week of a new round of 11,000 employee layoffs, Amazon launched a new round of layoffs.

On March 20, Amazon CEO Andy Jassy said in a memo to employees that Amazon will lay off another 9,000 jobs in the coming weeks, which is another major adjustment less than four months after the company announced 18,000 layoffs last November, and set off the largest wave of layoffs in Amazon's history.

The first principle is "streamlining"

Amazon's shares fell more than 1% after hours that day. Over the past year, Amazon's stock price has fallen nearly 40%.

Amazon's latest round of layoffs is expected to affect Amazon's cloud computing, advertising, human resources and Amazon's Twitch division, of which Twitch will lay off about 400 people. Jassy said the layoffs were done to further streamline costs in response to recent economic uncertainties.

"The overarching principle of our annual plan for this year is streamlining while continuing to invest heavily in key long-term customer experiences." Jassy said. He remains optimistic that the company, including retail and Amazon Web Services, as well as other new divisions that continue to be worth investing in.

Amazon's goals this year are similar to Meta's, both aimed at streamlining. Meta founder CEO Zuckerberg also designated 2023 as Meta's "year of efficiency."

Since the last round of layoffs at U.S. tech companies, it has reflected that the drivers of economic growth are not enough to support large-scale expansion. Companies including Meta, Google, Microsoft, and Amazon have laid off more than 100,000 jobs.

During the pandemic, tech giants including Amazon and Meta have expanded massively. By the end of 2021, the company's global workforce had nearly doubled from nearly 800,000 in the fourth quarter of 2019 to more than 1.6 million.

Deng Zhijian, China investment strategist at DBS Bank, told First Financial Reporter: "We believe that the turnover of the technology industry will still grow this year, but profits will regress, and controlling costs is the main reason for accelerating layoffs. ”

Deng Zhijian believes that layoffs cannot be regarded as a regression in the business of American technology companies, and the demand for technology continues unabated. "Coupled with the use of technology and automation, there is a need to streamline personnel in various industries to optimize costs and maximize the efficiency of the enterprise." He said to the first financial reporter.

After the pandemic, global streaming originals, including Amazon, have resumed growth, which has also increased the cost of expenses. According to the latest report from research institute Omdia, in 2022 Amazon released 203 titles on Prime Video with a total of 764 hours, the highest annual total in the company's history.

According to Amazon's latest quarterly earnings report, there was little profit in the fourth quarter, and the company's first-quarter guidance was also disappointing, with revenue growth expected to remain around 5%.

The challenge of the post-Bezos era

After Amazon founder Bezos resigned as the company's CEO, Amazon's stock price fell 44%. Since Jassy took over as CEO, he has also been under intense pressure to find a new engine of growth for the company.

To further save money, Amazon suspended construction of the second phase of its new campus in Arlington, Virginia, earlier this month, in addition to the company's other construction projects in Nashville, Tennessee, and Bellevue, Washington, on hold, in part because most of the company's employees have been working remotely since the pandemic.

Over the past year, many of Amazon's still-experimental product plans have been put on hold, such as the Scout delivery robot, the Care telemedicine program and the children's video calling device. In addition, Amazon has closed pop-up stores and bookstores, as well as offline stores including Fresh and Go convenience stores.

It is worth noting that while technology companies are laying off employees, major giants are still increasing their investment in AI projects. At present, technology giants including Microsoft, Google and Meta have released GPT-like large language models, hoping to occupy the commanding heights of the next round of AI, but so far, Amazon has not released relevant technologies and application scenarios.

Jassi told employees at an all-hands meeting last month that AI has been an important area of Amazon's long-term focus, and Amazon has noticed the increasing accessibility of generative AI tools and plans to invest further in the area.

According to an internal Amazon email, the company wants engineers to use its own ChatGPT-like AI tool, CodeWhisperer, an AI coding assistant that responds to ChatGPT-like natural language queries, according to an internal Amazon email.

CodeWhisperer, first built and first launched last year by Amazon Web Services' cloud computing division, is designed to generate code recommendations based on previous code and comments, similar to Github's Copilot. The head of CodeWhisperer also compared the AI tool's work to ChatGPT in a recent Linkedin post, saying that when more people use CodeWhisperer, more data improves its overall performance.