Amazon Announces Major Workforce Reduction Amid Analyst Optimism

The e-commerce and cloud computing giant Amazon is preparing to initiate a significant new round of job cuts, according to a recent report. The company is set to begin layoffs on Tuesday, January 27, 2026, targeting approximately 30,000 positions globally. This move follows a previous reduction of 14,000 roles completed in October 2025.

CEO Andy Jassy has framed the upcoming workforce reduction as a strategic effort to streamline operations and reduce corporate bureaucracy, rather than a reaction to immediate financial pressures. The initiative aligns with Jassy's broader plan to enhance operational efficiency and accelerate decision-making processes within the sprawling corporation. The cuts are expected to impact several key divisions, including the cloud unit Amazon Web Services (AWS), the core retail business, the Prime Video division, and the human resources department.

Bullish Analyst Outlook Contrasts with Headline News

Despite the restructuring news, analysts from Citi Research expressed a positive view of the company's financial trajectory on Friday. The firm reaffirmed its "Buy" rating on Amazon shares, setting a price target of $320. Their optimism is largely fueled by an anticipated acceleration in cloud revenue growth.

Citi analysts project that AWS revenue for the fourth quarter of 2025 will show a year-over-year increase of 22.5%. This robust growth expectation is supported by the division's strategic artificial intelligence partnerships and ongoing expansion of its cloud infrastructure. Furthermore, Citi's data indicates that Amazon's core online retail business experienced a solid holiday shopping season.

Should investors sell immediately? Or is it worth buying Amazon?

External Challenges and Financial Setbacks

The corporate landscape is not without its headwinds. CEO Jassy confirmed this week that tariffs originally implemented during the Trump administration have led to price increases on the Amazon platform. Although the company built up inventory in early 2025 to mitigate the impact, those stockpiles were depleted by the fall, resulting in higher costs that are now being passed on to both sellers and consumers.

In a separate financial development, Amazon is facing a substantial write-down. The company has declared a $475 million investment in Saks Global as "effectively worthless" following Saks Global's bankruptcy filing on January 14. This investment will be fully written off.

All Eyes on the February Earnings Report

Amazon is scheduled to release its quarterly financial results on February 4, 2026. Investors and market watchers will be scrutinizing the official AWS growth figures, with the 22.5% forecast serving as a key benchmark. According to data from TipRanks, the current average analyst price target for Amazon stock stands at $294.45, implying a potential upside of approximately 25% from recent levels. The share price has traded within a 52-week range of $161.38 to $258.60.