Cloud job cuts as AI bites at AWS and across the industry

Reuters is one of the many news outlets reporting on Amazon’s announcements it’s cutting hundreds of jobs, specifically in its Amazon Web Services (AWS) cloud computing unit. The layoffs come following CEO Andy Jassy’s recent warning that the adoption of generative AI tools would result in job losses.

It’s well known that AI adoption in many corporations worldwide is increasing rapidly, with AI agents implemented to automate routine tasks. While this saves costs and reduces the reliance on human workforces, AI is already doing what many have feared for years – displacing employees and phasing out certain positions.

In an email statement, an Amazon spokesperson said, “We’ve made the difficult business decision to eliminate some roles in particular teams in AWS.” According to the source, “decisions are necessary as we continue to invest, hire, and optimise resources to deliver innovation for our customers.”

Rather than a sign of failure, job cuts are reportedly part of a strategy to remain competitive and efficient in the changing tech sector that’s influenced by automation and the gargantuan investment in AI.

The mass lay off at AWS has little to do with business performance: AWS sales increased by 17% during the first quarter of 2025, reaching $29.3 billion in value. Meanwhile, operating income rose 23% to $11.5 billion in turnover. These are numbers that suggest strong performance based on traditional labour.

Despite escalating sales numbers, it is reported that several employers at Amazon received emails as part of the latest cuts, informing them that their roles had been terminated and their computers would be deactivated. Amazon said that a number of groups in AWS have been part of the layoffs, including several ‘specialists’ who sell existing services and produce new product ideas.

The workforce trimming continues a recent trend by Amazon, affecting those working in its books, devices, services, and the Wondery podcast. The company laid off 18,000 employees in 2022 and 2023, a move reportedly tied to its purchase of Wondery in 2020 for a reported $300 million.

In early June this year, Amazon released a statement regarding layoffs in its books division, saying, “as part of our ongoing work to make our teams and programs operate more efficiently, and to better align with our business roadmap, we’ve made the difficult decision to eliminate a small number of roles in the Books organization.”

Whether those job cuts are directly related to AI implementation is not confirmed, but CEO Andy Jassy’s remarks in June 2025 about the latest cuts leave little room for doubt. Jassy confirmed Amazon’s plans to cut corporate jobs in favour of AI, saying, “In virtually every corner of the company, we’re using generative AI to make customers’ lives better and easier… As we roll out more generative AI and agents, it should change the way our work is done. We will need fewer people doing some of the jobs that are being done today, and more people doing other types of jobs.”

Jassy could have been speaking for many large technology companies when he said, “It’s hard to know exactly where this nets out [sic] over time, but in the next few years, we expect that this will reduce our total corporate workforce as we get efficiency gains from using AI extensively in the company.”

Amazon is not the only firm downsizing its workforce, with Microsoft, Meta, and CrowdStrike also announcing layoffs this year. Microsoft announced recently that it will be laying off almost 4% of its workforce in a bid to “rein in costs amid hefty investments in artificial intelligence infrastructure.” That will affect approximately 6,000 employees, particularly those in sales.

The soaring costs of building its AI infrastructure has seen Microsoft’s cloud margins shrink compared to 2024, hence the reduction of “organisational layers with fewer managers.”

Microsoft’s gaming division has also been impacted by the layoffs, with 10% of its staff reportedly cut.

At Meta, 5% of its workforce comprising of the company’s “lowest performers” are to go. CEO Mark Zuckerberg has warned employees more job cuts are likely as the year progresses, and a Meta spokesperson has said cuts will “raise the bar” for performance management.

CrowdStrike’s announcement of its plans to lay off around 500 employees means 5% of its total workforce will be looking for other work. Like Amazon, Microsoft, and Meta, the cuts are part of cost-cutting strategies set against confident financial predictions for profit, with a projected FY2026 revenue between $4.74 billion and $4.81 billion. Cybersecurity is not being spared from workforce losses as businesses in the tech sector strive to balance their revenue ambitions with efficient, cost-effective operations that are cheaper to run.

Historic, widespread workforce cuts have often been performance-related in more than name, but 2025’s trend of tech layoffs paints a different picture, one that is driven by AI automation, restructuring, and shifts towards smaller teams whose work is supplemented by AI. Few industries are escaping the impact of AI as it reshapes roles and tears through traditional operations.

Long term job stability in tech companies may soon become merely something future generations hear about as part of industry myth. A World Economic Forum paper reveals 41% of global companies are expecting to reduce their workforce by 2030 because of AI. Halfway to the end of the decade, and many traditional tech and cloud roles are under pressure, and evidence suggests even mid-career professionals working in adaptable roles are at higher risk of job losses. AI is on the way to dominate the cloud job market at levels previous generations of technology never achieved.

(Image source: “Dark Skies” by CaptPiper is licensed under CC BY-NC 2.0.)

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