What you need to know
- Amazon announced its Q1 financial earnings on Thursday.
- The company posted $127.4 billion in revenue, a 9% increase from the same period in 2022.
- Amazon recently announced two rounds of job cuts, as well as the shuttering of its Halo product line.
Amazon is riding high on a positive quarter after posting $127.4 billion in revenue on Thursday. This represents a 9% increase from Q1 2022 and is the result of increased net sales and improvements across the company’s businesses.
“There’s a lot to like about how our teams are delivering for customers, particularly amidst an uncertain economy,” said Amazon CEO Andy Jassy in a statement.
“Our Stores business is continuing to improve the cost to serve in our fulfillment network while increasing the speed with which we get products into the hands of customers (we expect to have our fastest Prime delivery speeds ever in 2023).”
Jassy praised Amazon’s Advertising business, which was up 23% to $9.5 billion, a notable increase as rivals like Alphabet and Meta struggle with reduced ad spending. He also highlighted Amazon Web Services (AWS), which saw 16% revenue growth, despite cautious spending from customers.
However, despite improvements in AWS and other businesses, like other big tech companies, Amazon is managing the impact of mass employee hiring over the pandemic. The company announced multiple layoffs, cutting 18,000 jobs earlier this year and additional 9,000 jobs lost in the most recent cut.
These cuts mirror similar moves made by Meta and Alphabet, which reported higher-than-expected revenue last quarter as they push to make the companies more efficient.
As part of Amazon’s efforts, the company announced just a day before releasing its Q1 financials that it was shuttering the Halo brand, which consists of fitness trackers and other devices like the still fairly new Halo Rise. The company cited “significant headwinds” and an uncertain economic environment for the decision to axe the division. Amazon also blames a crowded space as it competes with devices from Fitbit, Garmin, Xiaomi, and more.
Amazon will likely feel some financial burden from refunds it will have to issue customers and the support it will provide to affected employees. Support for Halo products ends July 31, and the health data will be deleted after August 1.
During the earnings call, Jassy also talked about Amazon’s work in AI and machine learning, which has been a growing focus for companies amid the increasing popularity of ChatGPT. And despite layoffs in the Devices & Services business, Jassy notes that Amazon still aims to build “the world’s best personal assistant.”
“I think when people often ask us about Alexa, you know, what we often share is that if we were just building a smart speaker, it would be a much smaller investment. But we have a vision, which we have conviction about, that we want to build the world’s best personal assistant.”
“And we’ve had a large language model underneath it, but we’re building one that’s much larger and much more generalized and capable,” Jassy continues. “And I think that’s going to really rapidly accelerate our vision of becoming the world’s best personal assistant.”
