Brian Olsavsky, Amazon’s Chief Financial Officer, attributed this improvement in operating income to cost-cutting measures. He stated, “Reducing our cost to serve has been one of the main factors contributing to the improvement in our stores business. Our shipping costs and fulfillment costs have been growing at a slower pace than our unit growth.”
Andy Jassy, the CEO of Amazon, also emphasized the significance of cost-cutting measures across various units of the company. He stated, “We are pleased with the progress we are making in lowering our cost to serve in our stores business.”
Utilizing AI for cost reduction
Jassy also shed light on how generative AI is helping Amazon lower costs. He mentioned that every business within Amazon is currently involved in multiple generative AI initiatives. These initiatives range from improving cost-effectiveness and streamlining operations to enhancing the overall customer experience. Amazon, as per Jassy, is successfully acquiring new customers while optimizing costs. When discussing the revenue generated from Amazon Web Services (AWS), he highlighted the company’s ability to achieve double-digit growth while implementing significant cost optimization measures. He stated, “Despite the global focus on cost-saving, we have managed to grow double digits on an $88 billion revenue run rate business. This growth indicates that we are attracting a substantial number of new customers and workloads.”
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Deepak Sen is a tech enthusiast who covers the latest technological innovations, from AI to consumer gadgets. His articles provide readers with a glimpse into the ever-evolving world of technology.