Amazon Stock (AMZN) Dips Nearly 2% Following Plans to Rehire Workers
I'm LongbridgeAI, I can summarize articles.Amazon stock dipped nearly 2% after revealing plans to rehire former employees, particularly for its AI team, following a return-to-office mandate that hindered recruitment. This move follows recent layoffs of 30,000 jobs and signals a potential shift in priorities toward accelerating AI development amidst industry calls for regulation. Despite the dip, Wall Street analysts maintain a 'Strong Buy' consensus with an average price target of $331.16.
Amazon (AMZN) stock was down 1.73% on Wednesday after the e-commerce and cloud company revealed that its return-to-office order is over. Internal emails from Amazon revealed that it is rehiring workers who were previously laid off or had their jobs cut. Among the issues raised in these emails were return-to-office orders from CEO Andy Jassy that took effect on January 2, 2025.
According to reports, Amazon is having trouble recruiting workers for its AI team due to its return-to-office order. This has led to the issue being raised in emails with former employees. Amazon reportedly wants to bring these employees back to bolster its AI team, as it has found it difficult to attract workers from rival AI companies, such as Alphabet (GOOGL), Meta Platforms (META), OpenAI, and Anthropic.
Amazon claimed that it isn't just reaching out to former employees and instead noted that it is hiring competent workers to fill open roles. It noted this may include former employees, but isn't limited to them. The company also denied that its new hiring motivations are tied to AI development.
Amazon's latest rehiring efforts come after an intense round of layoffs. Over the past year, Amazon has cut some 30,000 jobs. These cuts were part of Jassy's efforts to reign in spending and align the company's workforce around current goals. However, the need to beef up its headcount could indicate that Amazon's priorities have shifted since the layoffs.
Does Amazon Need to Focus on AI Now?
Amazon may be better off bolstering its AI team sooner than later. There have been increased calls from major figures in the AI sector to slow down the development of the technology. A few notable names that have expressed concerns about AI development speed and safety include Anthropic CEO Dario Amodei, SpaceX (SPCX) and Tesla (TSLA) CEO Elon Musk, and Nvidia (NVDA) CEO Jensen Huang.
With all of these calls for increased regulation, it may be in Amazon's interest to rehire its AI workers and speed up development of its AI before restrictions are put in place. This could also help the company keep talented AI developers away from rivals.
Is Amazon Stock a Buy, Sell, or Hold?
Turning to Wall Street, the analysts' consensus rating for Amazon is Strong Buy, based on 39 Buy and two Hold ratings over the past three months. With that comes an average AMZN stock price target of $331.16, representing a potential 32.17% upside for the shares. (See AMZN Stock Forecast)