MarketWatch First Take: Amazon cuts jobs to reset tech giant after monster growth in the pandemic, but investors still worried

by | Jan 5, 2023 | Stock Market

Wall Street analysts are applauding the cost-cutting moves by two technology giants in the last two days amid a major slowdown in revenue, but investors appear to be more worried about Amazon, where its highly profitable and big-growth cloud business has helped cushion it in the past. Late Wednesday, Amazon.com Inc.
AMZN,
-2.37%
confirmed a Wall Street Journal report that it plans to cut 18,000 jobs. That was far more than the initial reports and estimates that the company would cut about 10,000 jobs, thousands of which began late last year. Amazon shares fell as much as 2.37% on the news.

So far the Amazon cuts are the biggest among tech companies, which are seeing a sharp drop in the double-digit percentage growth rates many large companies saw during the pandemic. The company has only said that the majority of job cuts are in its Amazon Stores and its PXT organizations, which it calls its people experience and technology solutions teams. It has not said whether any cuts are coming from its cloud services business, Amazon Web Services (AWS). On Wednesday, Salesforce.com Inc.
CRM,
-2.33%,
one of the big providers of cloud-based software and a pioneer in cloud software, said it would cut 10% of its workforce. Investors sent Salesforce shares higher on that news yesterday. Both companies went on big hiring sprees as their revenue surged, to help keep up wi …

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