Amazon: Cost cutting, layoffs and more: How Amazon recorded its best quarter in almost two years

Amazon was one of the first companies to have announced mass layoffs last year. It followed up with more layoffs and cost-cutting measures early this year. Reports suggested that Amazon laid off as many as 27,000 employees and took other cost-cutting measures. If Amazon’s quarterly earnings are to go by, the move seems to have paid off. Amazon reported revenue of $134.1 billion, which was an 11% increase year-over-year. Amazon has also seen its operating income improve.

Brian Olsavsky, chief financial officer, Amazon, told investors on the earnings call that cost cutting has played a major role in it. “One of the largest drivers of this operating income improvement in the stores business has been reducing our cost to serve, with shipping costs and fulfillment costs continuing to grow at a slower pace than our unit growth,” he said.
Andy Jassy, Amazon CEO, also spoke about cost-cutting measures in various units of the company. “We’re encouraged by the progress we’re making on several key priorities, namely lowering our cost to serve in our stores business,” he said.

AI to lower costs

Jassy also spoke about generative AI helping in lowering costs for Amazon. Every single one of our businesses inside of Amazon, every single one has multiple generative AI initiatives going right now, he said. “They range from things that help us be more cost-effective and streamlined in how we run operations in various businesses to the absolute heart of every customer experience in which we offer,” he added.
Amazon, as per Jassy, is adding a lot more customers and optimising costs simultaneously. Talking about AWS’ revenue, he said, “To grow double digits on an $88 billion revenue run rate business, when you’re seeing that amount of cost optimization as every company in the world is trying to save as much money as they can in the last year, to still grow double digits on a base that size means that we’re acquiring a lot of new customers and a lot of new workloads.”