Amazon CEO Andy Jassy on Thursday published his annual shareholder letter where he reflected on one of the most challenging periods in the e-retailer’s history, and signaled he remains confident that recent cost-cutting efforts will pay off.
Jassy said he’s spent the last several months taking a “deep look across the company, business by business” to examine whether each unit has the ability to generate enough revenue, operating income, free cash flow and return on invested capital.
“In some cases, it led to us shuttering certain businesses,” Jassy wrote.
As part of the belt-tightening efforts, Amazon in recent months axed a telehealth service and other experimental projects. It also pressed pause on expansion of its Fresh supermarkets, and pared back warehouse expansion.
Amazon also instituted the largest job cuts in its 29-year history, letting go 27,000 employees through multiple rounds of layoffs. It also put in place a hiring freeze for its corporate workforce.
Even amid the cutting, Jassy, who took over from founder Jeff Bezos in 2021, said Amazon is still focused on growing some of its more unproven businesses, like its Kuiper internet satellite and grocery units.
The company is also investing in new areas, such as machine learning technology, he added. Amazon is responding to a boom in generative artificial intelligence tools, like OpenAI’s ChatGPT, that have captured the attention of Silicon Valley and set off an arms race between Microsoft and Google.
Amazon has used machine learning in various applications over the past few decades, Jassy said. It’s now working on its own large language models, or AI programs, that have the potential to improve “virtually every customer experience,” he added.
Jassy said Amazon’s juggernaut e-commerce and cloud computing units still have room to grow. But he acknowledged those businesses have encountered some recent challenges, including a slowdown in Amazon Web Services as companies are more cautious about their cloud…
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