Amazon's Second Round Of Downsizing Likely To Drive Margins, Analyst Says

Citi analyst Ronald Josey upgrades the rating on Amazon.Com, Inc (NASDAQ:AMZN) to Buy with a $145 price target.
Earlier today, Amazon shared plans to eliminate another ~9K positions bringing the total number of jobs eliminated to ~27K since November, representing ~8% of the corporate headcount.
The downsizing impacted AWS, PXT, Advertising, and Twitch divisions suggesting the reductions have affected almost every major division.
While the restructuring at AWS likely speaks of continued softening demand—AWS exited January on a mid-teens growth rate Y/Y ex-FX (vs. 20% Y/Y ex-FX in 4Q22).
The analyst believes it also supports stabilizing margins at AWS while potentially expanding margins in North America in a Tuesday note titled "Amazon Further Reduces Corporate Headcount, Which Should Improve Operating Margins Going Forward."
Retail is partly driven by shipping efficiencies, increased FBA fees, a consolidated retail footprint, and improved overall operations.
While Josey recognizes AWS and Retail's challenges, he also believes Amazon is becoming more profitable, particularly in North America Retail.
Price Action: AMZN shares traded higher by 2.60% at $100.25 on the last check Tuesday.
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