While Amazon had a rocky year, AWS remains reliable cash cow

Image Credits: Ron Miller

When the world shut down, Amazon became the world's go-to online store. Amazon flourished when people couldn't leave their homes. Money poured into its finances, its stock price went up, and it built warehouses to meet the demand.

The company had 840,000 employees in the first quarter of 2020. It had over 1.5 million workers by the first quarter of the next century. The problem was that people stopped buying things online and went back to brick-and- mortar stores.

Andy Jassy, the CEO of Amazon, seems to know that the market has changed, and he has been having his managers look for places to cut spending and reduce operating costs.

If reports are correct, Amazon cut up to 10,000 jobs in the near term to make up for the hiring that happened during the peak of the Pandemic.

The company lost almost half of its value this year, as it gave up almost all of the gains it made on the back of the swine flu. Jeff Bezos is a little less rich than he used to be, and his ex-lover has less to give. Jassy has a lot of headaches to deal with and has to cut costs.

The cloud arm of Amazon, which was run by Jassy before he was promoted to the corner office, has always performed at a high level. The third quarter was a time when companies tried to cut costs.

In the most recent quarter, the analyst crowd expected a revenue of $21 billion. Cloud computing has been one of the fastest growing areas and a miss was a big deal.

The consensus is that the cloud business still has plenty of room to grow in spite of external factors, as evidenced by the fact that Amazon Web Services is currently on a run rate to become an $80 billion business.

Regardless of currency issues, slowing growth or customers looking at only modest IT spending increases in the new year, Amazon Web Services will be fine. It's possible that Jassy will have to cut costs across the company, but it's also possible that the company won't be affected.