Is Amazon Layoff bearish news? Let the data tell you the answer!
According to the news:
- Amazon Stock News: Amazon Alexa Layoffs, Jeff Bezos Updates
- Amazon Shoppers Criticize Company’s Layoffs After Site Outage
Amazon revealed it would lay off 10,000 employees in the middle of November 2022. Most layoffs are in the devices division, retail, and human resources, with the Amazon Alexa division being chief among them.
It was revealed that the Amazon Alexa division was underperforming more than anticipated. Some reasons that led to the division being targeted for layoffs include low employee morale, failed attempts to monetize Alexa, and poor engagement from developers and users.
The total number of people laid off may reach 10,000 or more when all is said and done, but this number represents 3% of Amazon’s corporate workforce and less than 1% of its global workforce.
The article said the layoff is 3% of the Amazon corporate workforce. And the most impact is on Amazon Alexa which means there is no significant influence on the operating income of AWS. Let us use Amazon's operating income to have a feeling of how huge the impact would be for the business.
The impact is on the retail section which has 25% ((7271–924) / 24879) of the total operating income. As the news said Amazon laid off 3% of its employees. Thus, the approximate loss of operating income is 25% * 3% = 0.75%. To sum up, I think if its AWS business is still running smoothly, there is no need to be afraid of holding Amazon shares.
There are some other drivers we can observe in the near future. Amazon will invest 1 billion $ in Amazon-Prime new films. Will Prime be the next driver like AWS for the upcoming fiscal years? Let data tell us the answer in the next round!
