HP will cut up to 6,000 jobs by 2028 as it doubles down on AI, betting automation and AI PCs can boost productivity despite chip cost headwinds.

The post HP Announces Up to 6,000 Layoffs in Massive AI Restructuring Plan appeared first on TechRepublic.

HP will cut up to 6,000 jobs by 2028 as it doubles down on AI, betting automation and AI PCs can boost productivity despite chip cost headwinds.

The post HP Announces Up to 6,000 Layoffs in Massive AI Restructuring Plan appeared first on TechRepublic.

Nvidia's earnings were dominated by its data center business.

Amazon’s third-quarter profits rose 38% to $21.2 billion, but a big part of the jump had nothing to do with its core businesses of selling goods or cloud services.

The company reported a $9.5 billion pre-tax gain from its investment in the AI startup Anthropic, which was included in Amazon’s non-operating income for the quarter.

The windfall wasn’t the result of a sale or cash transaction, but rather accounting rules. After Anthropic raised new funding in September at a $183 billion valuation, Amazon was required to revalue its equity stake to reflect the higher market price, a process known as a “mark-to-market” adjustment.

To put the $9.5 billion paper gain in perspective, the Amazon Web Services cloud business — historically Amazon’s primary profit engine — generated $11.4 billion in quarterly operating profits.

At the same time, Amazon is spending big on its AI infrastructure buildout for Anthropic and others. The company just opened an $11 billion AI data center complex, dubbed Project Rainier, where Anthropic’s Claude models run on hundreds of thousands of Amazon’s Trainium 2 chips.

Amazon is going head-to-head against Microsoft, which just re-upped its partnership with ChatGPT maker OpenAI; and Google, which reported record cloud revenue for its recent quarter, driven by AI. The AI infrastructure race is fueling a big surge in capital spending for all three cloud giants.

Amazon spent $35.1 billion on property and equipment in the third quarter, up 55% from a year earlier.

Andy Jassy, the Amazon CEO, sought to reassure Wall Street that the big outlay will be worth it.

“You’re going to see us continue to be very aggressive investing in capacity, because we see the demand,” Jassy said on the company’s conference call. “As fast as we’re adding capacity right now, we’re monetizing it. It’s still quite early, and represents an unusual opportunity for customers and AWS.”

The cash for new data centers doesn’t hit the bottom line immediately, but it comes into play as depreciation and amortization costs are recorded on the income statement over time.

And in that way, the spending is starting to impact on AWS results: sales rose 20% to $33 billion in the quarter, yet operating income increased only 9.6% to $11.4 billion. The gap indicates that Amazon’s heavy AI investments are compressing profit margins in the near term, even as the company bets on the infrastructure build-out to expand its business significantly over time.

Those investments are also weighing on cash generation: Amazon’s free cash flow dropped 69% over the past year to $14.8 billion, reflecting the massive outlays for data centers and infrastructure.

Amazon has invested and committed a total of $8 billion in Anthropic, initially structured as convertible notes. A portion of that investment converted to equity with Anthropic’s prior funding round in March.

Amazon beat estimates for its third-quarter earnings with $180.2 billion in revenue, up 13% year-over-year, and earnings per share of $1.95, up from $1.43 in the year-ago period.

• Net income was $21.2 billion, up from $15.3 billion last year.
• Wall Street expected $177.7 billion in revenue, and earnings per share of $1.56.

Amazon shares were up more than 11% in after-hours trading. Growth in the company’s stock has lagged behind rivals Microsoft and Google this year.

Investors were likely pleased with a re-acceleration in Amazon’s closely watched cloud computing unit, which reported $33 billion in sales, up 20% year-over-year and topping analyst estimates. In a press release, Amazon CEO Andy Jassy said AWS is “growing at a pace we haven’t seen since 2022.”

“We continue to see strong demand in AI and core infrastructure, and we’ve been focused on accelerating capacity — adding more than 3.8 gigawatts in the past 12 months,” Jassy added.

The cloud growth should help Amazon counter the Wall Street narrative that its cloud business is falling behind Microsoft and Google in pursuing the AI opportunity.

• Amazon and other cloud giants are pouring billions of dollars into capital expenditures to support AI initiatives. Amazon said earlier this year it expects to increase capital expenditures to more than $100 billion in 2025.
• The company makes most of its operating profits from AWS — $11.4 billion in the third quarter, more than half Amazon’s total operating income.
• AWS was hit with a major outage last week that took down several major sites and services. It blamed an internal issue within the cloud giant’s infrastructure.

Amazon’s overall operating income reached $17.4 billion in the third quarter — flat compared to a year ago. The company had forecast operating income of $15.5 billion to $20.5 billion.

The company said its Q3 operating income reflected two special charges:

• A $2.5 billion charge related to a recent settlement with the Federal Trade Commission related to Prime memberships.
• About $1.8 billion in estimated severance costs related to its massive 14,000 corporate layoff announced earlier this week.

The workforce reduction comes amid an efficiency push at Amazon. Jassy has cited a need to reduce bureaucracy and become more efficient in the new era of artificial intelligence.

• Reuters reported this week that the number of layoffs could ultimately total as many as 30,000 people, which is still a possibility as the cutbacks continue into next year. 
• Jassy told employees in a company-wide memo earlier this year that Amazon’s corporate workforce will shrink in the coming years as generative AI takes hold.

Online store sales were $67.4 billion, up 10%.

• The revenue includes sales from the company’s annual Prime Day sales event from July 8-11.
• Analysts are watching for impact from tariffs on the company’s retail business, which still makes up the largest portion of its overall revenue.
• In its Q1 earnings report in April, Amazon added “tariff and trade policies” to a list of factors that create uncertainty in its results, joining existing risks such as inflation, interest rates, and regional labor market constraints.

Here are more details from the second quarter earnings report:

Advertising: The company’s ad business brought in $17.7 billion in revenue in the quarter, up 24% from the year-ago period, topping estimates. Advertising, along with AWS, is a major profit engine.

Third-party seller services: Revenue from third-party seller services was up 12% to $42.5 billion.

Shipping costs: Amazon spent $25.4 billion on shipping in Q3, up 8%.

Physical stores: The category, which includes Whole Foods and other Amazon grocery stores, posted revenue of $5.6 billion, up 7%.

Headcount: Amazon employs 1.57 million people, up 2% year-over-year. That figure does not include seasonal and contract workers.

Prime: Subscription services revenue, which includes Prime memberships, came in at $12.6 billion, up 11%. 

Guidance: The company forecasts Q4 sales between $206 billion and $213 billion. Operating income is expected to range between $21 billion and $26 billion, compared with $21.2 billion in the year-ago quarter.

$AMZN Amazon Q3 FY25:

• Revenue +13% Y/Y to $180.2B ($2.4B beat).
• Operating margin 10% (+0.5pp Y/Y).
• EPS $1.95 ($0.39 beat).
• Q4 Guidance: ~$209.5B ($1.4B beat).

☁️ AWS:
• Revenue +20% Y/Y to $33.0B.
• Operating margin 35% (-3pp Y/Y). pic.twitter.com/2kaNIvC7oy

— App Economy Insights (@EconomyApp) October 30, 2025

Microsoft reported fiscal first-quarter revenue and profits ahead of analysts’ expectations on Wednesday, with Azure revenue growth climbing to 40%.

The earnings report came as the company continued to deal with the lingering effects of a widespread cloud outage that started earlier in the day.

The company’s capital expenditures reached a record $34.9 billion — reflecting its long-term buildout of cloud infrastructure to meet demand for artificial intelligence. That was up from $24.2 billion in Q4. Microsoft had projected capital spending of more than $30 billion for Q1.

Along with that unprecedented buildout, Microsoft sought to address investor concerns about a potential AI bubble, by highlighting its commercial remaining performance obligation (RPO), a measure of future contracted revenue. That backlog grew 51% year-over-year to $392 billion.

The company also disclosed for the first time that this RPO has a weighted average duration of roughly two years, a move intended to show investors that its record capital spending is supported by strong, long-term customer demand.

Revenue was $77.7 billion for the quarter ended Sept. 30, Microsoft’s first quarter of fiscal 2026. That was up 18%, and compared with average analyst expectations of $75.39 billion. The company said the result was driven by strong demand for cloud and AI services.

Profits were $27.7 billion, or $3.72 per share, beating expectations of $3.66 per share.

Earlier Wednesday, an Azure cloud services outage disrupted operations for customers worldwide including Alaska Airlines, Xbox users and Microsoft 365 subscribers. Microsoft reported as of early afternoon that it was rolling back the faulty configuration and that customers should see improvements.

Microsoft stock was down by about 3% in after-hours trading. The company’s market value reached $4 trillion after the announcement of its new OpenAI deal on Tuesday morning.

With a new OpenAI partnership in hand, Microsoft is going into its earnings report Wednesday afternoon with a resolution to one of the biggest questions about its business.

The company’s market value reached $4 trillion again as Wall Street reacted to the details of the new Microsoft-OpenAI agreement, which gives Microsoft a 27% equity stake in OpenAI’s new for-profit entity, and a commitment for $250 billion in cloud purchasing by the ChatGPT maker.

Analysts expect the tech giant to report another strong quarter, fueled primarily by continued momentum in its Azure cloud business and growing adoption of its Copilot AI tools.

Quarterly revenue is expected to be about $75.4 billion for the first quarter of Microsoft’s 2026 fiscal year, which ended Sept. 30, according to numbers tracked by Yahoo Finance. That would represent a 15% jump compared to the $65.6 billion reported in the same period last year. 

Analysts expect earnings per share of $3.66, up about 11% year-over-year from $3.30.

Investors will be paying close attention to the growth rate in Microsoft’s Azure cloud business, with some analysts expecting as much as 39% growth (in constant currency, excluding the impact of exchange rates). Hitting this mark would exceed the company’s prior guidance and maintain the 39% growth pace set in the previous quarter.

Yet the potential for an AI bubble will no doubt be the focus of questions on company’s earnings conference call. Amid surging investment and growing valuations in the AI sector, some analysts and tech leaders are warning that the enthusiasm could outpace the business realities

Microsoft and Google parent Alphabet will both report numbers on Wednesday afternoon, and Amazon the following day, making for quick comparisons across the major cloud platforms.

As of the most recent quarter, ended in June, Microsoft reported more than $75 billion in annual Azure revenue for its just-ended fiscal year, compared to an annual run rate that had surpassed $50 billion for Google Cloud and a run rate of nearly $124 billion for Amazon Web Services (based on its $30.9 billion revenue in the June quarter).

Check back with GeekWire on Wednesday afternoon for full coverage.