Amazon Is Cutting 16,000 Jobs. Should You Buy, Sell, or Hold AMZN Stock Here?

Group 1 - Amazon announced the layoff of 16,000 corporate jobs, representing approximately 4.6% of its corporate workforce, following a previous layoff of about 27,000 employees in late 2022 and early 2023 [1][2] - The layoffs are part of a strategy to reduce bureaucracy and streamline operations within the organization, which has over 1.5 million employees, primarily in warehouse roles [2] - Speculation exists that these layoffs may be linked to AI integration, as many functions can now be performed by AI, although concerns about the return on investment (ROI) from AI investments may also be influencing the decision to downsize [3] Group 2 - Amazon's stock performance has been disappointing, with returns just above 5% for 2025, compared to 18% returns from the S&P 500 during the same period, partly due to fears surrounding AI investments [5] - The company's current forward P/E ratio of 34.14x is 79% below its five-year average of 165.07x, indicating a significant discount in valuation compared to historical performance [6] - Other valuation metrics also show discounts, with the forward EV/EBIT trading at a 34.6% discount and the forward price-to-book ratio 16.8% below its five-year average [6]