Amazon Is Cutting 16,000 Jobs. Should You Buy, Sell, or Hold AMZN Stock Here? Jabran Kundi – Barchart – Fri Jan 30, 10:54AM CST Columnist Share Amazon delivery truck by Andrew Stickelman via Unsplash Amazon delivery truck by Andrew Stickelman via Unsplash Amazon (AMZN) stepped up its restructuring efforts on Jan. 28 when it announced cutting 16,000 corporate jobs at the company. Roughly 4.6% of its corporate workforce. This has reminded people of the late 2022 and early 2023 period, when the firm laid off about 27,000 people. Beth Galetti, who is the senior vice president of people experience and technology at Amazon, has stated that these layoffs were a part of efforts to reduce bureaucracy and layers within the organization, which is quite bloated at an employee count of over 1.5 million, though a vast majority of these are warehouse workers. In parallel to these layoffs, Amazon continues to add staff in other areas of the business. Some have speculated that these layoffs are a result of AI integration. This could be true to an extent, as many functions can now be seamlessly performed with AI. However, others are arguing that the lack of ROI on AI investments is what’s forcing the company to become leaner. Either way, it is quite possible that these layoffs continue in the coming months as Amazon reevaluates its corporate workforce. About Amazon Stock Amazon is a global tech company, known primarily for its Amazon.com platform. It was founded by Jeff Bezos and is headquartered in Seattle, Washington. The company offers cloud services through Amazon Web Services (AWS), which has become a crucial growth engine. It is also among a small group of companies that have invested billions into AI infrastructure. The company’s 2025 returns were just above 5%. Quite disappointing for the company, considering the S&P 500 ($SPX) delivered 18% returns in the same period. Some of this was due to the fear that companies that were investing more than a hundred billion dollars in AI per year may not see a great return on investment. Amazon was in the same boat, though the company management claims it is still in the very early stages of setting up new projects within the organization. The future is certainly interesting, but short-term traders are paying the price. www.barchart.com As with many other tech stocks that have underperformed in the last year, Amazon is also trading at a significant discount to its own five-year average valuation. For instance, on a forward P/E basis, the company’s current 34.14x multiple is a massive 79% below its five-year average of 165.07x! This is a colossal discount, which can also be seen in other metrics, though to a much lesser extent. The forward EV/EBIT is trading at a 34.6% discount, whereas the forward price-to-book is also 16.8% below the five-year average. Some of this discount may be due to slower growth. Amazon has grown its EPS at a compound annual growth rate of 37% in the last five years. From 2026 to 2028, it is expected to grow at 11%, 22%, and 24%, respectively. The growth is slowing down, but it is by no means small. The valuation metrics have shrunk accordingly, but with the company focusing on a lean corporate structure and AI projects yet to bear fruit, this could be an interesting entry point for investors. Amazon Posts Strong Cloud Growth in Q3 Amazon announced its Q3 earnings report on Oct. 30 and reported an EPS of $1.95 against expectations of $1.57. This massive beat caused the stock to go up over 10% in post-market trading. AWS revenue was $33 billion, while $17.7 billion came from advertising. Both segments beat Wall Street expectations comfortably. While Amazon’s future EPS expectations are modest according to Wall Street, the CEO is calling the growth “a pace we haven’t seen since 2022.” He is confident that the robust AI demand will impact the bottom line soon. The company has added 3.8 gigawatts of capacity in the last 12 months. The market has criticized Amazon’s AI progress in the past, but things can change quickly, as we witness in the market every week. Amazon opened its $11 billion AI data center called Project Rainer in October 2025. Projects like these are expected to continue in the near term as the company has no plans of slowing down on its AI investments. The company’s Q4 earnings report is set to be delivered on Feb. 5, and here’s what you can expect from the company. What Are Analysts Saying About AMZN Stock? A consensus “Strong Buy” rating is not a surprise, especially considering such a strong company is just coming out of underperformance from the previous year. Amazon has a mean target price of $297.67, which is more than 22.5% above the current share price. The firm is expected to invest $50 billion in OpenAI, a development that could see analysts revise their price targets soon. For now, the highest price target on Wall Street is $360, which offers just under 50% upside from here on.

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    amazon

    Amazon (NASDAQ:AMZN) is back in the headlines after announcing a fresh wave of corporate layoffs. On Jan. 28, the company revealed it would cut roughly 16,000 corporate jobs — about 4.6% of its corporate workforce — as part of a broader restructuring effort aimed at reducing bureaucracy and streamlining decision-making.

    For investors, layoffs at a mega-cap company like Amazon can trigger mixed reactions. Some view cost cuts as a sign of discipline and improved profitability. Others worry the company is bracing for slower growth or struggling to justify massive investments, especially in artificial intelligence (AI). Either way, the announcement has reignited debate around one question: should you buy, sell, or hold AMZN stock here?

    Why Amazon Is Cutting 16,000 Jobs Now

    Amazon’s layoffs are being framed as a move to reduce internal layers and improve efficiency. Beth Galetti, Amazon’s senior vice president of people experience and technology, indicated the company is focused on shrinking bureaucracy in a corporate structure that has expanded significantly over time.

    While Amazon employs more than 1.5 million people globally, most are warehouse and logistics workers. Still, corporate headcount reductions matter because they often reflect leadership’s view of productivity, operational priorities, and margin targets.

    Some market watchers have linked the job cuts to AI adoption, arguing that automation and AI tools can now handle tasks that previously required larger teams. Another interpretation is more cautious: that companies spending tens of billions on AI infrastructure may be under pressure to show stronger near-term returns.

    In reality, both can be true. Amazon can simultaneously invest aggressively in AI while also trimming corporate overhead to protect profitability.

    AMZN Stock: A Giant That Underperformed in 2025

    Amazon remains one of the world’s most dominant tech companies, but AMZN stock has not been immune to investor skepticism. In 2025, the stock returned just over 5%, a disappointing outcome compared to the S&P 500 Index ($SPX), which gained 18% in the same period.

    This gap reflects broader market concerns about “AI capex fatigue,” where investors question whether the biggest spenders will see strong returns quickly enough. Amazon, like several other mega-cap peers, has committed massive capital to data centers, chips, and AI infrastructure—projects that may take time to translate into earnings growth.

    For short-term traders, that uncertainty has been painful. But for long-term investors, periods of underperformance can sometimes create opportunity, especially when fundamentals remain intact.

    AMZN Stock Valuation Looks Cheaper Than Its Own History

    One of the more interesting points for investors is that Amazon is trading at a notable discount compared to its historical valuation averages. The company’s forward price-to-earnings multiple is far below its five-year average, suggesting the market is pricing in slower growth or higher risk than it has in the past.

    That doesn’t automatically mean AMZN stock is “cheap,” since valuation always depends on future growth expectations. But it does show sentiment has cooled meaningfully relative to earlier years, when investors were willing to pay almost any price for top-tier tech growth.

    Amazon’s earnings growth is expected to moderate compared to its earlier explosive pace. Still, Wall Street forecasts show that the company may continue producing solid EPS expansion through 2026–2028, supported by cloud services, advertising, and operating leverage.

    AWS and Advertising Remain Amazon’s Key Engines

    Amazon’s most important growth engine is still Amazon Web Services (AWS). In its fiscal Q3 report (released Oct. 30), Amazon posted a major earnings beat, delivering EPS of $1.95 versus expectations of $1.57. The strong results sent the stock sharply higher in post-market trading.

    AWS revenue came in at roughly $33 billion, while advertising delivered about $17.7 billion—both beating Wall Street expectations. These two segments are crucial because they carry higher margins than Amazon’s retail business and provide the profit foundation needed to fund long-term innovation.

    Amazon leadership has also highlighted accelerating momentum tied to AI demand, suggesting growth is improving compared to prior quarters. If that narrative continues, it could help AMZN stock regain leadership status in the mega-cap tech group.

    AI Investments: Risky Spending or the Next Big Catalyst?

    Amazon has been criticized at times for the sheer scale of its AI and infrastructure spending. However, the company appears committed to building long-term capacity. It added 3.8 gigawatts of capacity over the last 12 months and opened an $11 billion AI data center project in October 2025.

    These investments are expensive, but they also reinforce Amazon’s strategy: becoming a key platform provider for the AI era, not just a retailer with cloud services.

    For investors, the debate is whether this spending will produce strong enough returns soon enough. If AWS AI services scale rapidly and enterprise customers keep migrating workloads to Amazon, these investments could eventually look like a masterstroke. If growth disappoints, investors may continue demanding cost cuts and tighter discipline—potentially limiting upside.

    Buy, Sell, or Hold AMZN Stock Ahead of Earnings?

    Amazon’s next major catalyst is its Q4 earnings report, scheduled for Feb. 5. With layoffs now in the spotlight, investors will be watching for:

    • AWS growth trends and AI-related demand signals

    • Advertising performance and margin expansion

    • Updated commentary on cost discipline and efficiency

    • Guidance that supports stronger earnings momentum in 2026

    Wall Street remains bullish overall, with AMZN stock holding a consensus “Strong Buy” rating and an average price target implying meaningful upside from current levels.

    Bottom line: Amazon’s layoffs may look unsettling at first glance, but they can also be interpreted as a profitability-focused reset while the company continues investing heavily in AI and AWS. For long-term investors, AMZN stock still looks like a “Hold-to-Buy-on-dips” type of name—especially if Q4 results confirm that cloud growth and AI monetization are strengthening.

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