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Why Amazon Laid Off Employees

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Amazon lays off a few hundred employees

In a rare move, Amazon (AMZN) has laid off a few hundred employees at its headquarters at Seattle, according to The Seattle Times. Amazon had just gone on a hiring spree, bringing its Seattle employee count from 5,000 eight years back to 40,000. The company has over 500,000 employees worldwide. The company still has 4,000 openings at its headquarters and 12,000 globally. According to the company’s most recent earnings report, the company’s global workforce has increased by a whopping 66% over the last year.

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Amazon is focusing on growth areas

The move comes as the company is trying to focus on fast growth areas such as its cloud computing unit, AWS (Amazon Web Services), and Alexa. AWS generated revenue of over $5 billion for the first time in the most recent quarter, growing over 40% YoY (year-over-year).

The company’s core e-commerce business is seeing most of the layoffs, as margins are narrow and growth is slowing. The pullback is rare and likely to be a one-time occurrence. The company continues to aggressively invest in other businesses, recently announcing that it was launching its own logistics business. Despite the recent turmoil, the company’s stock has risen ~20% this year and ~70% in the last 12 months.

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