Good morning! As America prepares for the solar eclipse, even prisoners will have their moment in the (non) sun, after 6 inmates sued New York’s corrections department to allow them to see the event. Today we explore:
Amazon announced on Wednesday that it's cutting several hundred roles in its cloud computing division, Amazon Web Services (AWS).
If you’ve ever streamed a movie on Netflix, attended a meeting on Zoom, or scrolled through your Facebook feed, you've indirectly used AWS, which provides computing power, storage, databases, servers, and more to millions of businesses — helping it to become the profit center of Amazon’s increasingly sprawling empire. Indeed, although it accounted for just 16% of revenue last year, AWS alone contributed 67% of the company’s ~$37 billion in operating profit.
Efficiency: From A to Z
The layoffs came just a day after Amazon ditched the “Just Walk Out” cashier-less technology used at its grocery stores — which turned out to be heavily reliant on a review team team in India — and at an interesting time for Amazon generally.
Although it overlaps with its peers Alphabet, Meta, Apple, and Nvidia in many ways, Amazon is a much more complicated entity: for example, no other tech company owns grocery stores. It’s the nation’s second-largest private employer, with 22x more people on its payroll than Meta, and the company’s core expertise is in less buzzy niches: deliveries, servers, supply chain logistics, e-commerce seller services, and, increasingly, ads.
Those businesses are wildly different, but Amazon’s ruthless drive for efficiency is universally applied to them all. The layoffs in the AWS division follow cuts in the subscription services business — home to Prime, Audible, and Twitch — earlier this year, and all told Amazon has shed more than 27,000 roles since the end of 2022 across almost every area of the company.
FOMO: Amazon isn’t completely ignoring the shiny new sectors, recently completing a $4 billion investment into AI startup Anthropic.
Felling, falling
Since much of the news nowadays is populated by terror-inducing climate developments, the occasional silver lining in the environmental sphere is to be savored (though, not without some caution).
The World Resources Institute’s annual survey for 2023 found that 3.7 million hectares of primary tropical forests were lost globally last year. That’s 9% less than the year before, and 39% less than in 2016, when fires across the Amazon caused staggering reductions — but still the equivalent of ~10 soccer fields of forest being destroyed every minute.
Major shifts in Brazil and Colombia, which saw year-on-year drops in primary forest loss of 36% and 49%, respectively, helped these figures substantially. Indeed, both countries have seen new leaders enact environmental policies to reduce deforestation, including increasing funding for protecting areas and offering incentives for alternative uses of the land.
Unfortunately, on a longer time horizon, the chart above reveals little substantial progress — and, if the promise made by 145 nations at COP26 to end deforestation by 2030 is to be met, there remains a lot of work to be done. While fire-related losses, like those seen in Canada last year, are harder to contain, reduced logging and felling for agriculture must remain a top priority.
Beauty fades
The beauty industry has seen some unsightly setbacks this week. Shares of chain retailer Ulta Beauty fell 15% on Wednesday, following warnings from CEO Dave Kimbell that demand for beauty products was cooling — dragging cosmetic stocks E.l.f. Beauty (-12%), Estee Lauder (-4%), and Coty (-6%) down with it.
Ulta now forecasts comparable sales to slacken to 4-5% growth for the year ahead, down from more than 15% growth in fiscal 2022. With execs outlining the significant stalling of luxury makeup purchases, investors lost yet more confidence in Estée Lauder in particular, as the struggling legacy brand’s pivot away from department stores has yet to pay off.
Makeunder?
While beauty has long been considered a safe bet in retail, with consumer spending in the sector tending to stay relatively constant during times of financial hardship (see the “Lipstick Effect”), this slowdown indicates that perhaps beauty shoppers aren’t completely immune to 2-and-a-half years of inflation.
E.l.f Beauty especially could find itself on something of a powder keg with the impending fate of the TikTok bill. Having blown up on the ByteDance-owned app with Gen-Z-oriented marketing campaigns, and last week becoming the first brand to feature in a TikTok Shop Super Brand Day, the vegan cosmetics company has seen sales skyrocket, notching 17 consecutive years of growth. Indeed, all slowdowns are relative — and the brand has plenty of momentum to fall back on, reporting an 85% jump in sales in its most recent quarter.
• In a deal estimated to be worth $300 million, legendary rock band KISS has sold its entire music catalog to Sweden-based Pophouse Entertainment Group.
• Alphabet is reportedly weighing the possibility of acquiring HubSpot, the ~$35 billion marketing software company.
• 100,000 live salmon made a break for freedom when they spilled from a truck, with the majority finding refuge in a nearby creek.
• Riding Oppenheimer's success, IMAX shattered records with over $1 billion in global ticket sales in 2023, standing out in a year where the wider box office continued to struggle.
• Mapping the route of the solar eclipse on Monday via Airbnb bookings for next week.
