According to the Wall Street Journal, in a move aimed at reducing costs, tech giant Amazon is reportedly slashing hundreds of jobs from its cloud-computing business, Amazon Web Services (AWS). This latest round of layoffs underscores the company’s strategic restructuring efforts amidst changing market dynamics.

The job cuts primarily target roles in sales, marketing, and global services within AWS. Additionally, the physical stores’ technology team, responsible for developing the systems powering Amazon’s cashierless checkout programs, is expected to see a significant staff reduction.

This announcement follows Amazon’s decision to discontinue its “Just Walk Out” cashierless technology at Amazon Fresh grocery stores across the United States. According to the company’s statement, the technology will be replaced by an alternative cashierless system.

An Amazon Web Services spokesperson defended the layoffs, stating that the company identified areas where streamlining was necessary. Emphasizing a commitment to innovation, the spokesperson reiterated Amazon’s focus on hiring within its core business areas.

“While these decisions are difficult, they are necessary as we continue to invest, hire, and optimize resources to deliver innovation for our customers,” the spokesperson told WSJ.

Amazon’s cloud-computing business has long been a significant contributor to its profitability. However, sluggish demand last year prompted the company to reassess its operations and prioritize cost-reduction initiatives. Despite this, Amazon has continued investing in emerging technologies, particularly artificial intelligence (AI).

Amazon’s AI efforts have been mainly spearheaded by AWS, which recently made headlines with a $4 billion investment in AI startup Anthropic. This move underscores Amazon’s commitment to advancing AI capabilities within its cloud platform.

The tech industry has witnessed a spate of job cuts in recent months, with companies like Alphabet, Microsoft, and Salesforce also trimming their workforces. In January, Amazon announced significant layoffs across its film and television studio divisions and Twitch streaming platform as part of broader cost-cutting measures.

Despite these layoffs, major tech companies, including Amazon, have experienced overall workforce growth since the onset of the pandemic. An earlier analysis shows that Amazon has nearly doubled its workforce since 2019.

To mitigate the impact on affected employees, Amazon has pledged to provide pay and benefits for at least 60 days following their termination and offer severance packages to eligible individuals. However, the news of layoffs underscores the challenges facing tech companies and their employees in an ever-evolving business landscape.