Dear Amazon Stock Fans, More Layoffs Are Coming This Week

Core Insights - Amazon is undergoing significant restructuring, including a new round of layoffs affecting approximately 30,000 roles, following previous cuts of about 14,000 jobs in October 2025 [1][2] - The layoffs will impact various teams, including AWS, retail, and Prime Video, and are intended to reduce bureaucracy rather than just costs [2] - Despite these layoffs, Amazon is making substantial investments in AI and cloud infrastructure, with projects totaling up to $50 billion, indicating a strategic long-term growth focus [3] Group 1: Layoffs and Restructuring - Amazon is set to cut around 30,000 jobs, which exceeds its previous record of 27,000 cuts in 2022 and 2023 [2] - CEO Andy Jassy has emphasized that these layoffs aim to streamline operations and reduce bureaucracy [2] - The layoffs could negatively impact employee morale and sentiment in the short term [2] Group 2: Investments and Growth Strategy - Amazon has announced several major capital projects, including a $3 billion data center in Mississippi and $15 billion in Indiana, alongside $35 billion in AI investments in India [3] - These investments are viewed as strategic long-term growth initiatives rather than immediate earnings drivers [3] - The aggressive push into AI and cloud infrastructure is expected to support revenue growth for AWS and create new revenue streams [3] Group 3: Stock Performance and Valuation - Amazon's stock has remained relatively flat over the past year, underperforming the S&P 500 Index, which gained over 16% during the same period [4] - Despite the underperformance, Amazon's trailing price/earnings ratio is approximately 33×, significantly higher than the 20× median for the retail sector [5] - Investors are willing to accept a premium for Amazon's stock due to its scale and growth potential, despite traditional valuation metrics indicating it is not "cheap" [5]