TNB Tech Minute: Amazon’s Artificial General Intelligence Unit Faces Job Cuts

**SPEAKER_1** (0:01)
Countless companies invest in AI tools without tying them to tangible business outcomes. Join McKinsey later to learn how leaders rewire their organizations for sustained impact and value.

**Julie Chang** (0:15)
Here's your afternoon TNB Tech Minute for Wednesday, July 22nd. I'm Julie Chang for the Wall Street Journal. Amazon has cut jobs in parts of its artificial general intelligence unit, marking the latest targeted workforce reduction at a major tech company as the industry continues to pour billions of dollars into AI. The company didn't disclose how many employees were affected. An Amazon spokesperson said building large AI models remains a priority for the business, but that the cuts are part of an effort to sharpen its focus on initiatives that matter most for customers. Earlier this year, Amazon announced broad corporate layoffs affecting about 16,000 employees. As CEO Andy Jassy pushed to streamline the company while accelerating AI investments.
In earnings, Tesla's free cash flow fell for the first time in more than two years. As the EV maker supercharged spending with $5.8 billion in capital expenditures to expand its footprint in artificial intelligence and robotics. The company reported negative free cash flow of $1.1 billion for the second quarter. Revenue grew to $28 billion, up 26% from the year before. Revenue from its automotive business increased 23% from the year prior. Tesla's energy business revenue was $3 billion for the quarter, up 13% from the year before. Tesla's latest results come as the EV industry navigates the downturn in US sales, as well as continued competition from Chinese automakers.
And in its second quarter earnings today, IBM confirmed the disappointing results that it previewed last week, in a rare move that erased about $67 billion in stock market value. IBM earns $2.2 billion on revenue of $17.2 billion in the second quarter. The company's infrastructure revenue of $3.8 billion was down 7% from a year earlier. That unit was pulled down by lower than expected sales of data center mainframes, which fell 42%.
IBM warned investors that its full year revenue growth will be lower than previously forecast, now expecting a range of 4 to 5%.
But it still expects full year free cash flow to increase by about $1 billion from last year. And that's your TNB Tech Minutes. Check back in the morning for another Quick Tech Update.

**SPEAKER_1** (2:39)
AI Transformation is more than a tech initiative. It requires a broader rewiring of human skills and ways of working. Here's Dan Swann, Senior Partner at McKinsey.

**Dan Swann** (2:48)
One of the biggest unlocks we see is the human being capabilities around the technology. Whereas before you may need to be really good at analysis, now the skill might be how do you prompt these tools to get the right answers and outcomes. And so for us, it's a really big priority to help companies to understand how do you need to change the operating model of your organization and change the underlying capabilities of the people that are interacting with the technology. And when you see that all humming together, it can be really, really special.

**SPEAKER_1** (3:19)
Discover how McKinsey helps organizations rewire to outcompete with AI at mckinsey.com/techmoves.

**SPEAKER_4** (3:25)
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