Amazon is making investments in new areas like artificial intelligence.
Andy Jassy, the CEO of Amazon, wrote an annual letter to shareholders outlining the challenging periods the company has faced in the past and expressing his confidence that recent cost-cutting efforts will help the tech giant's growth. He also stated in the letter, posted on the official website of the e-commerce giant, that the decision to fire 27,000 employees was "hard" but it will benefit the company in the longer run.
"Over the last several months, we took a deep look across the company, business by business, invention by invention, and asked ourselves whether we had conviction about each initiative's long-term potential to drive enough revenue, operating income, free cash flow, and return on invested capital," he said the letter. Mr Jassy emphasised that this led to the shutting down of physical store concepts like Bookstores and 4 Star stores, the closing of Amazon Fabric and Amazon Care efforts and moving on from "some newer devices where we didn't see a path to meaningful returns".
"We also reprioritized where to spend our resources, which ultimately led to the hard decision to eliminate 27,000 corporate roles. There are a number of other changes that we've made over the last several months to streamline our overall costs, and like most leadership teams, we'll continue to evaluate what we're seeing in our business and proceed adaptively," he added.
Additionally, he highlighted that Amazon will keep on hiring staff and assured that it will continue to "compensation to stock options rather than cash."
In addition, he said in the letter that Amazon is making investments in new areas like artificial intelligence given the rise of artificial intelligence tools, such as OpenAI's ChatGPT, which has attracted Silicon Valley's attention and sparked a technological arms race between Microsoft and Google.
Mr Jassy claimed that throughout the last few decades, the company has applied machine learning to a variety of applications. It is currently developing its language models or AI programmes, that might enhance "virtually every customer experience".