Amazon.com, Inc. (AMZN) is expected to continue improving its profitability after all of its business units recorded strong results last quarter and announced plans for layoffs.
Amazon’s earnings per share (EPS) for the fourth quarter of 2023 exceeded market expectations by 24.2%. The cloud division met market expectations, while the e-commerce division exceeded them. Amazon’s U.S. e-commerce market share is nearing 40%, which is overwhelmingly dominant compared to the second-place operator, Walmart Inc., which holds a mere 6%. Amazon stated that the sales volume in the fourth quarter of the U.S. shopping season was the largest ever.
“Amazon recently announced plans to lay off some departments within its Amazon Web Services (AWS) business unit,” said Kim Myung Joo, an analyst at Korea Investment & Securities. He continued, “Improved delivery efficiency will also improve profitability.”
AWS, which pioneered this market as a key infrastructure for building and operating artificial intelligence (AI), is the top company in cloud market share.
AWS stated, “We need to simplify our organizational structure to continue focusing on key strategic areas that can yield the greatest effects. We have identified several areas that require simplification.” The company added, “This was not a decision made lightly. We will support employees subject to layoffs to find new roles within and outside Amazon.com, Inc.”
Meanwhile, Amazon has been downsizing for over a year. Starting at the end of 2022, it laid off nearly 27,000 employees across almost all company sectors throughout the last year.
Most Commented