Amazon was at the forefront of companies that implemented wide-scale layoffs last year. They continued with this approach in early 2021, implementing further job cuts and implementing cost-cutting measures. Reports indicate that Amazon laid off approximately 27,000 employees while also adopting other measures to reduce costs.
However, if we look at Amazon’s quarterly earnings, it seems that these moves have paid off. Amazon reported a revenue of $134.1 billion, which represents an 11% increase in comparison to the previous year. Additionally, Amazon has experienced an improvement in its operating income.
During the earnings call, Brian Olsavsky, Chief Financial Officer of Amazon, emphasized the role of cost-cutting in this improvement. He stated, “One of the main factors contributing to this operating income improvement in our stores business is reducing our cost to serve. Our shipping and fulfillment costs are growing at a slower rate than our unit growth.”
Andy Jassy, CEO of Amazon, also highlighted the company’s focus on cost-cutting measures across various units. He stated, “We are encouraged by the progress we have made in lowering our cost to serve in our stores business.”
AI-driven Cost Reduction
In addition to cost-cutting measures, Jassy mentioned the role of generative AI in reducing costs for Amazon. He stated, “Every single one of our businesses inside Amazon has multiple generative AI initiatives in progress. These initiatives range from helping us streamline our operations and reduce costs to enhancing the overall customer experience.”
Jassy further emphasized that Amazon is acquiring more customers while optimizing costs. When discussing AWS revenue, he stated, “To achieve double-digit growth in a business with an $88 billion revenue run rate, especially during a time when companies worldwide are trying to save money, indicates that we are acquiring new customers and workloads.”
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Alex Smith is a writer and editor with over 10 years of experience. He has written extensively on a variety of topics, including technology, business, and personal finance. His work has been published in a number of magazines and newspapers, and he is also the author of two books. Alex is passionate about helping people learn and grow, and he believes that writing is a powerful tool for communication and understanding.
