Shuttered businesses, canceled warehouses and hiring freezes: Amazon is having a wave of frugality under CEO Andy Jassy
Andy Jassy, CEO of Amazon and then CEO of Amazon Web Services, speaks at the WSJD Live conference in Laguna Beach, California, October 25, 2016.
Mike Blake | Reuters
Throughout its first 25 years as a public company, Amazon has operated under a singular mantra, often to the chagrin of Wall Street: growth is more important than profits.
Founder Jeff Bezos laid out that strategy in his first investor letter in 1997.
“We will continue to make investment decisions in light of long-term market leadership considerations rather than short-term profitability considerations or short-term Wall Street reactions,” Bezos wrote.
But with three-quarters of 2022 in the books, it’s clear that the tone has changed. Andy Jassy, who took over as CEO in July 2021, has been in cost-cutting mode to preserve cash as Amazon confronts slowing sales and a gloomy global economy. The stock is down 33% for the year, more than the 25% drop in the S&P 500 and is on pace for its worst year since 2008.
Amazon’s 2022 slump
CNBC
The wave of frugality is unfamiliar to Amazon investors and an employee base that swelled to 1.6 million last year from under 650,000 in 2018. In recent months, Amazon has shut down its telehealth service, discontinued a quirky, video-calling projector for kids, closed all but one of its U.S. call centers, axed its roving delivery robot, shuttered underperforming brick-and-mortar chains, and is closing, canceling or delaying some new warehouse locations. Amazon has also considered drastically reducing the size of its secretive skunkworks lab Grand Challenge, Insider reported.
On the recruiting front, Amazon is freezing hiring for corporate roles in its retail business. And last month’s annual hardware event, which normally showcases a roster of gadgets and robots that may or may not still be around in a year or two, was noticeably constrained compared to prior launch events.
“If we look at everything collectively, Amazon seems to care a little more about margin than they have historically,” said Tom Forte, an analyst at D.A. Davidson who recommends buying the stock.
Jassy addressed the recent efforts to rein in costs at Amazon’s global all-hands meeting on Monday.
“Good companies that last a long period of time, who are thinking about the long term, always have this push and pull,” Jassy said at the meeting, according to excerpts shared with CNBC. “There are some years where they’re expanding really broadly. Some years where they’re checking in and working on profitability, tightening the belt a little bit. And sometimes when you have multiple businesses like we do at Amazon, some businesses are expanding at the same time that others are checking in.”
Amazon is far from alone in feeling the pinch. Fellow tech giants Meta and Alphabet have also been cutting costs to reflect a challenging macro environment and a dramatic slowdown after a decade of consistent growth. Companies across the tech sector have announced layoffs and hiring freezes or have lowered their hiring targets for the coming months.
Not that Amazon has put the brakes on all new spending. The company has been on a buying spree in recent months, agreeing to acquire primary care provider One Medical for $3.9 billion, Roomba maker iRobot for $1.7 billion and Belgian warehouse robotics company Cloostermans for an undisclosed amount. The company also said it would spend about $1 billion over the next year on wage increases and expanded benefits for front-line workers, and it has plans to hire 150,000 employees to help manage the holiday rush.
“We have an enormous amount of things that we’re investing in and that will continue,” Jassy said at the meeting, referencing Alexa, Prime Video and grocery as examples of some areas where Amazon continues to spend. “The trick for us during this time is just to balance those long-term investments and bets and customer experiences that we believe are the future of the company, along with really focusing on delivering along the way.”
The recent trend of belt-tightening has raised a longer-term question because it’s coincided with the company’s first ever change in leadership at the top after Bezos’ departure. The change on Jassy’s watch has prompted some analysts and former employees to wonder whether there’s a permanent shift in strategy underway or a temporary reset reflecting economic uncertainty.
Bezos built a reputation as a fearless entrepreneur willing to make big risky bets that could require hefty investment and may not generate meaningful revenue for years, if ever. No wager was bigger than Amazon Web Services, the cloud-computing unit that Amazon launched in 2006 and that Jassy led until his promotion last year.
More recent projects under Bezos included self-driving robotaxis, cashierless stores and delivery drones, all in pursuit of making life easier for customers.
Bezos ultimately axed plenty of products that didn’t pan out after launch. One of the most infamous examples is the Fire Phone, Amazon’s first smartphone that was discontinued in 2015, a year after its debut. Other endeavors with a short shelf life included a restaurant delivery service, social media feed, a device designed to replenish items with one click, a ticketing service, an auction site and an online wine store.
“They’re completely unafraid to kill something that’s not working,” said Craig Berman, a former Amazon vice president for global communications. “That’s never been a problem for them in the past.”
As the head of AWS, Jassy was at the center of Amazon’s profit engine, which gave the company the fuel to invest elsewhere. But since taking over as CEO of the parent company, Jassy has had to navigate the biggest jump in inflation in 40 years, supply shortages and an aggressive organized labor push that’s challenged the company’s long-standing anti-union stance.
More cuts may be coming
He’s putting in place cuts at a time when Wall Street has little appetite for the kind of experimental high-risk investing that defined the Bezos era. In July, Amazon reported its third straight quarter of single-digit revenue growth, largely due to weakening demand in its core online stores business.
Jassy is also working to dial back Amazon’s Covid expansion, which left it saddled with too much warehouse space and too many staffers. Amazon reduced its headcount by 99,000 people to 1.52 million employees at the end of the second quarter after almost doubling in size during the pandemic.
More slashing could be on the docket.
Amazon is in the middle of its annual planning process, which occurs in two phases, referred to as “OP-1” and “OP-2.” OP stands for “Operating Plan.” Former Amazon employees Colin Bryar and Bill Carr wrote about the process in their 2021 book, “Working Backwards: Insights, Stories, and Secrets from Inside Amazon.”
OP-1 typically begins during the summer and involves months of preparation and planning. Each team puts together a proposal outlining key initiatives for the upcoming year, including any requests for funding or new hires. OP-1 documents are typically submitted before the start of the fourth quarter, which covers the critical holiday shopping period, and are reviewed by Amazon’s senior leadership team, called the S-Team.
The second phase, OP-2, takes place in January. That’s when teams finalize their annual plans, potentially tweaking them depending on fourth-quarter performance.
With the risk of recession on the rise, Amazon could be looking at further reductions in its investments if the holiday quarter is weaker than anticipated, a former Amazon manager told CNBC. Another ex-manager from the company said Jassy may be more deliberate about what spending requests he approves as a signal for where Amazon plans to focus given the uncertainty. Both former employees requested anonymity in order to speak candidly.
An Amazon spokesperson said in a statement that the company continuously evaluates “the progress and potential of our products and services to deliver customer value, and we regularly make adjustments based on those assessments.”
Layoffs unlikely
Still, don’t expect to see mass layoffs from Amazon even as the company curtails spending, or pulls the plug on some projects.
When Amazon winds down a business, it typically offers employees the chance to apply for a job elsewhere in the company, several former employees told CNBC. They’re usually given a window of one to three months to look for another role and have the opportunity to meet with various business leaders during that time.
“Amazon is not going to let good talent walk out the door,” said Andrea Leigh, a former Amazon executive who spent almost a decade at the company across a number of different businesses.
There can still be job losses. After Amazon announced it was winding down its telehealth service Amazon Care, it said 159 employees could be laid off. Another 236 employees will be let go from Care Medical, an independent company that was contracted by Amazon to treat Care patients.
One new invention that Jassy may be counting on to goose revenue is a second Prime Day sale. Taking place Tuesday and Wednesday of this week, it’s the first time Amazon has had two of its discount bonanzas in the same year since it launched Prime Day in 2015.
Ahead of its third-quarter earnings report later this month, the multiday shopping event may provide Amazon with an early sneak peek at what’s coming in 2023.
President Donald Trump speaks before signing executive orders in the Oval Office at the White House on September 19, 2025 in Washington, DC.
Andrew Harnik | Getty Images
President Donald Trump raised the fee for an H-1B visa to $100,000 on Friday, leaving companies scrambling to respond.
With many left wondering whether their careers will remain in tact, here’s a breakdown of the new H-1B fees:
What did Trump change?
As of Sunday, H-1B visa applications will require a $100,000 payment. Previously, visa fees ranged from $2,000 to $5,000 per application, depending on the size of the company.
Employers now must have documentation of the payment prior to filing an H-1B petition on behalf of a worker. Applicants will have their petitions restricted for 12 months until the payment is made, according to the White House.
Who does this impact?
The fee will only be applied to new H-1B applicants, not renewals or current visa holders, according to White House press secretary Karoline Leavitt. The fee will be implemented in the upcoming lottery cycle.
Those who already have H-1B visas and are located outside the U.S. will not be required to pay the fee in order to re-enter.
Leavitt also clarified that the $100,000 is a one-time payment and not an annual charge.
Exceptions can be made to any immigrant whose employment is deemed essential in the national interest by the Secretary of Homeland Security and does not pose a threat to the security or welfare of the U.S.
Employees with B visas who have start dates prior to October 2026 will also receive additional guidance in order to prevent using those temporary business visas as a workaround for H-1B visas.
Who are these workers and why are they needed?
H-1B visas allows highly skilled foreign professionals to work in specialty occupations that generally require at least a bachelor’s degree to fulfill the role. Jobs in the fields of science, technology, engineering and math, or STEM, usually qualify.
Many employers use H-1B workers to fill the gaps in these highly technical roles that are not found within the American labor supply.
Companies in the tech and finance sectors rely heavily on these specially-skilled immigrants, particularly from India and China, which accounted for 71% and 11.7% of visa holders last year, respectively.
How many H-1B visas does the tech industry use every year?
The current annual cap for H-1B visas is 65,000, along with an additional 20,000 visas for foreign professionals with a master’s degree or doctorate from a U.S. institution. A lottery system is used to select additional petitions if demand exceeds the cap.
Since 2012, about 60% or more of approved H-1B workers had computer-related jobs, according to Pew Research.
Amazon was the top employer for H-1B holders in the fiscal year 2025, sponsoring over 10,000 applicants by the end of June, according to U.S. Citizenship and Immigration Services. Microsoft and Meta had over 5,000 each, while Apple and Google rounded out the top six with over 4,000 approvals.
WATCH: CoreWeave CEO on H-1B visas: Additional fee is ‘sand in the gears’ for access to talent
Nvidia will invest $100 billion in OpenAI as the artificial intelligence lab sets out to build hundreds of billions of dollars in data centers based around the chipmaker’s AI processors, the companies said on Monday.
OpenAI plans to build and deploy Nvidia systems that require 10 gigawatts of power, the companies said on Monday. A gigawatt is a measure of power that is increasingly being used to describe the biggest clusters of AI chips.
Nvidia CEO Jensen Huang told CNBC’s Jon Fortt in an interview in San Jose, California, that the 10 gigawatts is equal to between 4 million and 5 million graphics processing units (GPUs), which is what the company will ship in total this year and “twice as much as last year.”
“This is a giant project,” Huang said in the interview, alongside OpenAI CEO Sam Altman and Greg Brockman, the company’s president.
Nvidia’s first investment of $10 billion will be deployed when the first gigawatt is completed, according to a person familiar with the matter. Investments will be made at then-current valuations, said the person, who declined to be named because the details are private.
Nvidia stock rose almost 4% during on Monday, instantly adding roughly $170 billion in value to the company’s market cap, which now sits close to $4.5 trillion.
The partnership, which Huang described as “monumental in size,” highlights the intimate link between OpenAI and Nvidia, two of the biggest drivers of the recent AI boom. Demand for Nvidia’s GPUs started picking up when OpenAI first released ChatGPT in 2022, and OpenAI still relies GPUs to develop its software and deploy it to users.
“Nvidia invests $100 billion in OpenAI, which then OpenAI turns back and gives it back to Nvidia,” Bryn Talkington, managing partner at Requisite Capital Management, told CNBC after the announcement. “I feel like this is going to be very virtuous for Jensen.”
It further signals the magnitude of Nvidia technology that OpenAI will need to develop next-generation AI that can do more than its current models. OpenAI was already in need of an increasing number of chips to serve its users. The company said it had 700 million active weekly users.
“You should expect a lot from us in the coming months,” Altman said in the interview. “There are three things that OpenAI has to do well: we have to do great AI research, we have to make these products people want to use, and we have to figure out how to do this unprecedented infrastructure challenge.”
The companies said the investment will be deployed “progressively” as the infrastructure is built and that Nvidia would be a “preferred” supplier for OpenAI for chips and networking gear. Nvidia dominates the market for AI chips, but faces increased competition from Advanced Micro Devices and cloud providers which are developing their own chips and systems to tie them together.
OpenAI CEO Sam Altman walks on the day of a meeting of the White House Task Force on Artificial Intelligence (AI) Education in the East Room at the White House in Washington, D.C., U.S., September 4, 2025.
Brian Snyder | Reuters
In August, Huang told investors on an earnings call that building one gigawatt of data center capacity costs between $50 billion and $60 billion, of which about $35 billion of that is for Nvidia chips and systems.
Nvidia and OpenAI said that the first phase of the latest investment will come online in the second half of 2026, using Nvidia’s next-generation Vera Rubin systems.
Nvidia’s investment comes after a roster of investors valued OpenAI at $500 billion in a recent secondary round. Microsoft was one of OpenAI’s early investors, and has a strategic partnership to integrate OpenAI models into its cloud service, Azure, and Microsoft Office. Other OpenAI investors include SoftBank and Thrive Capital.
The companies said on Monday that the partnership will compliment the infrastructure work it is doing with Microsoft, Oracle, SoftBank and the Stargate project.
Altman referred to Nvidia and Microsoft as “passive” investors and two of the company’s “most critical partners” in the CNBC interview.
Huang said Nvidia’s investment is “additive to everything that’s been announced and contracted.” He indicated to CNBC that it’s in addition to anything the company has told Wall Street about its financial expectations.
While this investment dwarfs Nvidia’s prior commitments, the chipmaker has been opening its wallet of late to put funds in many companies in and around the industry.
Last week, Nvidia said it’s taken a $5 billion stake in Intel and announced that the two companies will collaborate on AI processors. Nvidia also said it invested close to $700 million in U.K. data center startup Nscale. And CNBC reported on Thursday that the company spent over $900 million to hire Enfabrica CEO Rochan Sankar and other employees at the AI startup, and to license the company’s technology.
WATCH: Nvidia-OpenAI partnership theme seems to be shortage of compute
-
Sports3 years ago‘Storybook stuff’: Inside the night Bryce Harper sent the Phillies to the World Series
-
Sports1 year agoStory injured on diving stop, exits Red Sox game
-
Sports2 years agoGame 1 of WS least-watched in recorded history
-
Sports2 years agoButton battles heat exhaustion in NASCAR debut
-
Sports3 years agoMLB Rank 2023: Ranking baseball’s top 100 players
-
Sports4 years ago
Team Europe easily wins 4th straight Laver Cup
-
Environment2 years agoJapan and South Korea have a lot at stake in a free and open South China Sea
-
Environment12 months agoHere are the best electric bikes you can buy at every price level in October 2024