Amazon Layoffs & Shutdown of Fresh and Go Stores, The Anthropic Cowork Threat | Jan 28, 2026

0:13Welcome everyone to the information's TITV. My name is Akash Pasricha. It is Wednesday, January 28th. First up today, Amazon is laying off roughly 16 ,000 workers as it restructures. That news lands as we get the first quarterly results from the Mag7 Microsoft and Meta report tonight. We will break it all down for you. We also have an exclusive story about Microsoft and how the company is responding to Anthropics' clawed co-work. Next up, it is time for our e-commerce reporter to take a bow. Less than a month into the year, one of the information's predictions has already come true. Amazon is shutting down its Amazon Fresh and Amazon Go grocery stores.

0:55We'll have a roundtable discussion on that. And we will wrap things with our weekly finance newsletter. Today's question, are SPACs making a comeback? We have got a lot to cover, so let's get right on into it. Amazon announced it is laying off another 16 ,000 people across the company as it looks to trim bureaucracy. This comes just a few months after Amazon said in October it was laying off 14 ,000 people. To help us break it all down, I want to bring on Josh Beck, Managing Director of AI and Internet Cloud at Raymond James. Josh, welcome to the show. It's great to have you here. Thank you for having me on today.

1:32so we had amazon ceo andy jassy on the show actually just last week our editor-in-chief jessica lessen sat down with him and we asked him about the layoffs that the company conducted in october and i want to play the clip for you because i want to get your reaction to it right after right now you know i think that um when we announced some role reductions people assumed it was just ai because ai is kind of in the ethos of everything right now and they just weren't ai They were really about our culture. And, you know, for the longest time, I've been at Amazon 28 and a half years now. It has always been that we've hired...

2:10I like how you're counting the half. I don't often get that, but it's really sticking through. It's always been that we've hired really strong, ambitious, customer-focused people who were owners. And those owners got to own the two-way door decisions, which are the overwhelming majority of decisions that we make. And just what happens as you get bigger? I mean, we have very unusual growth in our retail business and our AWS business and what we were doing in ads. And so I think very understandably, we added a lot of people. And when you add a lot of people in a short period of time, you almost always choose to organize with a lot of different layers and managers.

2:49And it kind of just makes it more digestible. digestible, but when you do so, you have unintended consequences. And some of which are that you end up taking ownership away from the owners. You know, you've got the pre-meeting for the pre-meeting for the meeting. People don't show up with recommendations anymore because they know that the decision is going to get made three meetings later. Yeah. And you just, that's not how we want to operate. We, as a leadership team, want to be the world's largest startup. And we are very convicted about that. And where we see layers stripping ownership, we're going to try and to take those layers away.

3:22We're going to try and flatten it. And we want our owners to be able to own. And so wherever we see obstacles to being able to move fast and have owners feel ownership, we're going to do so. And that has nothing to do with AI. Over time, there may be certain job functions where AI is really helping, where you change your allocation of people. But that hasn't been the case really today. So Josh, that was again, Andy Jassy last week in Davos. What did you make of the layoffs that they announced today and those comments that he made last week i mean are these just you know making up for over hiring is it because of ai what do you think yeah i i think it's a great question um you know i think there's certainly a huge expansion in in the workforce and you know it's just what i would say more operational pruning i don't really view it as a dramatic response to one challenge or the other.

4:22But bigger picture, Amazon's business with respect to AI cloud all of a sudden is much more competitively intense than the traditional cloud. At the same time, shopping and particularly agentic shopping, you've seen a lot of announcements from Google, OpenAI, others, is also dramatically changing. To me, to a little bit right the ship, kind of sharpen the organization as the competition is probably more intense than it has been for amazon in the last decade it is a smart move so so you you don't think this is necessarily to make room for all those investments in ai that the company is making if i'm hearing you correctly They are certainly lagging.

5:12If you think about the metrics that we have around AI Cloud, they mentioned they were at a multi-billion dollar run rate for Tranium. I think that's the chips plus the revenue they're earning from Bedrock. But this is actually much smaller than what you would hear from azure from google oracle even core weave so they really have their work cut out for them and that generally means you do need to invest and you need to focus you need to shift your teams this has been um a theme really across tech uh certainly you've seen kind of make big changes as well with respect to really sharpening their focus so to me it's it is creating the opportunity for them to invest, but it doesn't signal something kind of out of the ordinary, in my view.

6:04Do you think other tech companies follow suit? You know, I think it really depends. We've really judged all of these companies and written about them recently, particularly the mega cap companies, with respect to their AI stack and what does it look like there are ai native companies i think we all know they are doing quite well uh with their ai stack and then there are these large uh internet conglomerates they're having to make a big shift in their business probably bigger than it was with mobile and they are having to to reallocate their um priorities so you're seeing this take place at meta you know i would say that meta has their work cut out for them to really establish, maybe not the dominant number one or number two position in the model evaluations and model benchmarks.

7:00They need to be closer to the top, so they're certainly doing a reorganization. And Google had undergone something similar. Maybe it wasn't as high profile in the news, but did a large reorganization of their AI division and effectively gave uh the prior deep mind ceo a lot more clout um and bringing the product and commercial organizations together so i think this is this is a trend uh within the mega cap tech i think this is this is a big headline because it is such a big number but in the grand scheme of amazon you know it's something like one percent of their total workforce certainly much higher corporate-wise, but I think this is a trend throughout MegaCat tech.

7:45And a trend that you think will keep coming, you know, this will be a story in 2026. We will see these MegaCat companies continue to lay off people. In terms of future layoffs, so I think Google, for example, has done a very effective reorganization. I think estimates are really too low with respect to their top line. So I think they have the capacity to invest without some type of big restructuring. Amazon is more of the catch-up position. We kind of have this AI framework of laggard, tweener, and darling. We put kind of Amazon in the tweener category. So I certainly think they're a company that needs to ensue some large changes and really kind of improve their positioning.

8:38I would say Meta is in the same spot as well. I don't really know that they need to do something dramatic because the top line of their business is in such a good spot. Their returns on the ad stack have been great. And so I don't think this is indicative of some huge round of layoffs to come in the year end. So we've got Meta and Microsoft reporting today. Let's start with Meta. As you said, the top line growth has historically been very strong. What are you watching for and listening for on the call tonight with Mark Zuckerberg? So in my discussion with investors, I think the expectations for the top line are quite high.

9:24Checks with advertising agencies has been very upbeat. certainly the holiday season generally was viewed as outperforming expectations so i think really the focus will be what type of investment are they making in the business in 2026 and you know we really think that the level of investment of total expenses is probably going to be higher than what the street is expecting the street is something closer to 150 billion we think that's much more likely to be the lower end of the guidance. So you'll see them take their expenses up. Same with respect to CapEx. The street is closer to$110 billion. I think that's very much a low end.

10:13So I think the message will be higher investment because they are more in this tweener, catch-up position. And what evidence can they provide that they're going to improve their positioning with respect to the model, with respect to monetization. And that's really what I think people will be most focused on. And there has been certainly big developments in the last week or even weekend about this idea of agentic AI and really tying it into messaging. Certainly, Meta has an incredible platform with respect to WhatsApp and Messenger. So maybe we'll hear a new line or two in terms of what that opportunity means to them.

10:55Which feature are you referring to there exactly? There's been a number of developments that I think has generally made the attitude around agentic, particularly this personal AI assistant idea. Originally, it was called CloudBot, and there was a rename to MoltBot. So this idea of a assistance that can find you where you are within your messaging apps, go act on your behalf. Certainly, it's something of a demo, I would say, at this point. But this idea of an agent acting on your behalf, I think, is a powerful one. And Meta does have a really good platform to distribute a product like this. Right.

11:43Very quickly. So we've also got Microsoft. Microsoft, we're obviously going to be watching the Azure growth rate. Other than that, what is the one number that you're going to be paying most attention to tonight? So on our side, Andrew Merrick covers Microsoft. I think his view is he's pretty optimistic on the Azure business. I think there's a lot of focus on Copilot and whether it's really kind of gaining traction or not. And what about Google? you upgraded the stock recently. What are you watching for there when they do report? Yeah. So for Google, there's really two elements of the upgrade. So one is I think the search estimates are too low for 26 and 27.

12:31We think they're much more likely to be in the low teens. The street has that business decelerating to the high single digit rate. The primary reason for our optimism is we think the mix of AI overview and AI mode clicks is likely to go likely to go out pretty substantially. Those are much more valuable clicks. They have much higher conversion. So the cost per click, we think will actually be a much bigger driver of growth than the street is expecting. So we think the narrative on search is likely to prove and very similar with the cloud business. We actually think it can grow mid-40s next year, or sorry, in 2026.

13:16The street is at mid-30s. The primary reason is we think adoption of TPUs is really starting to ramp up. This has become a very popular imprints type of chip and workload. And then we also think the momentum with Gemini API is also picking up. So we really think the momentum at Google Cloud is likely to be better than anticipated. And so when investors look at these stocks, if you are accelerating, I certainly think it means you are becoming a winner or beneficiary in the AI race, and you can see multiple expansion in those scenarios. Great. Well, Josh, I want to thank you for coming on. That is Josh Beck from Raymond James here on TI TV.

14:02Thank you. Okay. Anthropic has been making headlines with its Claude Cowork tool, as we just talked about, that has engrossed Silicon Valley. Microsoft is among the companies that has paid close attention. And my colleague Aaron Holmes today published a story on how the company is responding. I want to bring on Aaron to talk all about it. Aaron, welcome to the show. It's great to have you here. Happy to be here. How is Microsoft responding to Claude Cowork?

14:55their AI product in Office work even better. And essentially, I think what is so compelling about Cowork is that it can carry out a lot of tasks kind of across applications and across even a user's desktop, which unlocks a lot of use cases that might not be possible with other out-of-the-box AI products. And I think that's something that everyone at Microsoft has been paying close attention to. So Cowork is one tool that obviously people have been talking about. The other tool is CloudBot. This other tool has come up. It's now called MoltBot. We now know they changed their name this week. What exactly is MoltBot, and why has that been getting so much attention?

15:39Yeah, so similar to Cowork, which relies on Anthropics cloud code models, MoltBot is basically an open source project that is a framework that calls the Anthropic models, which, of course, are not open source. And, you know, it essentially, similar to co-work, lives on a single computer and is able to use the computer in a way that a human would. It can see the screen, it can, you know, move the mouse around and carry out tasks. And so we've seen like a flurry of people experimenting with it and basically using it to carry out tasks like pointing it at a photo album full of receipts and saying, make this into an Excel spreadsheet with all of my expenses listed in a consistent format.

16:25And I actually heard that Microsoft CEO Satya Nadella has been playing around with ClaudeBot over this past weekend and was sending some of his findings to his deputies and saying, you know, why can't we think of ways for Microsoft to build similar products to this? and and just so i understand this so are i'm calling it moltbot you can call claude but whatever we know we're talking about the same thing but it is is claude co-work and moltbot are they sort of competitive products are they sort of like you know doing the same thing for people yeah so i mean they both rely on anthropics models co-work is something that anthropic put out formally in a preview.

17:10And Moltbot is more of a, I guess, fan project that still relies on those models, but they essentially do similar things. I think in both cases, they're pretty nascent in that it's not exactly clear if they're ready for an enterprise deployment. And Anthropic has warned people not to use co-work on risky projects or anything that involves sensitive data, just because there's a lot of risks that haven't been ironed out yet. So in that regard, it's not exactly the same as the enterprise-ready products that Microsoft is selling, but I think it's nonetheless pretty inspiring to the folks who are building competing products.

17:46So now you talked about how Satya Nadella has been paying attention to both of these product rollouts. Conceivably, he's probably thinking about how Microsoft can respond. Maybe with someone, Paul, you talked about Copilot maybe as being one avenue or one lever they could pull. How much of an advantage does Microsoft have, given that a lot of the programs like Excel, Word, etc.? I mean, Microsoft owns that stack. They run it. Is there an advantage there? And could it ultimately give it a leg up, even if it's late to the game? Yeah, I mean, the fact that Microsoft has this suite of apps that people already use to do work is definitely an advantage and gives them a feedback loop to keep improving new AI features in it.

18:30And I think another big advantage is that they own Windows. And right now, Cowork from Anthropic can only run on Mac. I think that from what I've heard, Microsoft leaders think that, you know, having Windows as their home turf could help them get a leg up on similar features that use the Windows operating system. And, you know, could make it more easy to build native products that do things like organize your files or, you know, put together documents based on various sources of information. So that's definitely, I think, one potential advantage that we see Microsoft having. And then the other thing that I've been thinking about is how Microsoft is sort of hedged on this play all around, given that they are investors in Anthropic.

19:14Anthropic is also a customer of Microsoft, which probably, I mean, you know, this is all cloud use that they need to buy essentially to run all these programs. So it seems kind of like a win-win in some ways. Yeah, I mean, I think this is kind of a theme throughout the AI boom that we've seen is there's this like constant shifting landscape of who is friends with other companies and who's competing. And often, you know, there's these situations where there's friendly competition between companies who are big customers of each other and are also building new products that go head to head, trying to win the same customers.

19:49And Microsoft has definitely leaned into that by investing in Anthropic after investing in OpenAI and also being a big user of models of both of those startups. Very quickly before you go. So we've got Microsoft reporting tonight their quarterly results. We know that Azure growth is going to be something that everyone watches. It's a number everyone pays attention to. What clarity are you hoping to get a little bit more of from Satya Nadella's comments on the call tonight? Yeah, I mean, I think everyone is continuing to see how much AI will uplift Azure. I think it's also going to be important to see how much remaining obligations they have in Azure, which have grown a lot just due to the fact that there's, you know, this backlog on GPUs being available.

20:39and I think a lot of people are also looking for, you know, any sort of evidence of how many customers are paying for 365 Copilot. Microsoft hasn't yet shared a specific number of paid 365 Copilot seats and so, you know, if they do that, I think that would definitely be notable. Great. Well, Aaron, I want to thank you for coming on. That is Aaron Holmes, our Microsoft reporter here at The Information. Okay, Amazon is shutting down its Amazon Fresh and Amazon Go grocery stores, ending what has been a long and winding saga for those franchises. That was actually one of our e-commerce reporter Anne Guillen's predictions for the company in 2026, which she made just a few weeks ago.

21:24It's crazy to think how quickly things happen sometimes. I want to bring on Anne to help us break it all down. And I also want to bring on Theo Waite, our reporter who previously has done a ton of reporting on Amazon's grocery journey. Anne and Theo, welcome to you both. It's great to have you both here. Hi, Akash. Good to be here. And what was the reason that Amazon gave this week for why it's shutting down these stores? Yeah. So when they made the announcement this week, Amazon said that both the Fresh stores, which are grocery stores, and then their Amazon Go convenience stores, which they're also closing, they said that they're pulling out of those projects because they couldn't provide a distinctive customer experience.

22:09And that's actually an idea that Jeff Bezos mapped out the first time that Amazon thought about getting into brick-and-mortar retail, which was about a decade ago. They opened some bookstores in the Seattle area. So that's always kind of been like the overarching thought for Amazon's brick and mortar strategy is trying to do kind of a more distinctive, sometimes more high tech customer experience. And so he's saying that they're saying the customer experience is not where they want it to be. What was it about the state of the stores that made you make this prediction a couple of weeks ago that they were going to shutter it entirely?

22:48Yeah, well, I'm sure Theo can walk you through some of his previous reporting, but the grocery business was really, really important for Amazon last year. And it was something that executives were talking about constantly saying how important it was for their business. It's part of a big push to increase how frequently people are shopping on Amazon. The CEO of their retail business, Doug Harrington, has an extensive background in the grocery business. And so they expanded both Whole Foods and their online grocery delivery services fairly aggressively last year. But during this big grocery push, we never really heard much about fresh.

23:32And as Theo has reported, there have been a lot of twists and turns in what the fresh concept entails exactly. And there just have always been some signals that Amazon didn't really have like a super clear vision or strategy for where Fresh fit into their grocery business. So I think all the signs were there, and especially just given that Amazon has been on kind of a broader cost-cutting and corporate efficiency push over the last year, as we've seen with the layoffs recently. Just kind of all the signs were there to me that fresh, it was maybe time for Amazon to cut their losses and work on some other projects when it comes to grocery.

24:19you did a ton of reporting on this when you covered amazon you of course cover all things elon musk now but i want to ask you about some of the stories that you wrote and before we do it i just want to remind myself so amazon fresh uh which one of these concepts was the one where you just walk in and walk out was that the amazon go uh they they both had that okay no it was an amazon go first okay the difference between fresh and go was was what fresh was bigger uh generally more of like a full grocery store and go was a convenience store but it's totally fine to be confused because they also had something called go grocery which was a you know some somewhere in between they never really figured out the branding it was totally confusing well i was just saying earlier that uh to um our producer that fresh and ghost sounds like a grocery store on its own i mean you know you could be forgiven for not thinking that is the name of the store on its own so you you did a ton of reporting on this and as as ann described it seems like this was sort of a slow death there were signs of of this talk a little bit about what you found over the course of the the couple years that you covered the company yeah i mean it's kind of been this this troubled project ever since I started covering Amazon, honestly.

25:40The first stories I did in 2022 was around the time that Amazon started doing its first major corporate layoffs in its history. I drove around New Jersey and found all these Amazon Fresh stores that had been built, but weren't actually opening. And they kind of had the lights on and had all this expensive of technology in them, but we're just sitting there. And, you know, that kind of like symbolized the approach to the whole program where Amazon, you know, had all these plans for hundreds of stores or, you know, thousands of stores, they were going to open them in Europe, they were going to do all this really advanced technology and all of them.

26:21And, you know, instead, they weren't really willing to ever like, fully pull the trigger and completely expand, but they also weren't willing to pull the plug until recently. But when you think about the company's motivation for getting into physical stores, it makes sense, right? Because Amazon's a company that wants to interact with every consumer in every possible way. And when you as a person are sitting at home and want to buy something, Amazon comes to mind no matter what the product is, whether it's eggs or a tv or something and you kind of need physical stores to reach people uh when they're thinking about groceries but the problem is like the like the stores really just like i guess do you as a consumer do you go to a grocery store to buy groceries or to like look at fancy new technology because i buy groceries because i go to buy groceries and the problem over and over again Yeah.

27:26And the problem with Amazon Fresh was that you go to the store and it feels like a tech demo that also has like groceries as a, you know, component of it. But primarily like there are these cameras and there's lights and there's everything feels designed around technology and it's very strange. and they never do. But okay, so let's just talk about this. So, and Theo, you spent a lot of time studying this. So Anne, you mentioned that the company sort of said that it didn't have a distinct customer experience, which, you know, yeah, fine. How do you make it distinct in a grocery store? I guess you walk in, walk out, you know, to the extent you don't have to wait in line.

28:03Maybe that's the big time saving there. But I'm just trying to figure out, you know, why the execute was this um was this a strategy issue was it an execution issue i mean it feels like setting up a grocery store and by the way they have whole foods too right i mean i don't know i i'm just trying to figure out why it didn't work it was because they they had a technology and then they tried to design a store to go around the technology in my opinion and it and that makes said the distinctive experience but it doesn't mean that it was actually good like i think that was the i think that was the problem right and now if you think about the the breadth of amazon's business it has all these other businesses cloud video the the the marketplace obviously um i mean this doesn't seem like a huge uh a huge impact i guess for the company financially i mean this So this was sort of like a side project in some ways, right?

29:06Yeah. I mean, like I said, the fresh concept has existed in some form for pretty much five whole years at this point. So I think five years is definitely more than enough time for Amazon to cut their losses. And yeah, it probably won't be a major hit to their business in the grand scheme of things. They actually said yesterday when they made the announcement that some of the store locations will be turned into Whole Foods stores. So they're not, you know, totally giving up on brick and mortar when it comes to grocery. I've also done some reporting that they're in the early stages of a new kind of big box super center concept that would be more similar to like a Walmart or a Target.

29:52They're working on that project in the Chicago suburbs right now. So I think, you know, in terms of fresh, it's not, you know, super significant for Amazon's business. But I think all the steps that Amazon has been taking more broadly over the last year or so, it does underscore how critical grocery is to their retail business. And they do need to get grocery right eventually in order for the retail business to continue growing. And so I think they feel confident about the direction of Whole Foods. They've been opening some new smaller Whole Foods stores, mostly in cities. They've also been working on a new rapid 30-minute delivery for groceries and other kind of like daily household products.

30:42So Amazon's clearly still willing to experiment with this, but I think they will need to eventually land on a grocery solution that works in order for their retail business to continue growing. And Theo, I'm going to give you the final word because I know that you are the most passionate about Amazon Fresh and Amazon Go in our newsroom. What lessons do you think Amazon is pulling out of this as it looks ahead to building out its physical storefront presence? You know, I would say that focusing on Whole Foods makes sense. I think they finally discovered what everyone else already knew, which is that Whole Foods was a better place to shop than Amazon Fresh.