AWS could face layoffs as parent cuts 9,000 employees

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AWS could face layoffs as parent cuts 9,000 employees
Andy Jassy, Amazon

The world leader in cloud computing, Amazon Web Services, is going to be impacted by a new round of 9,000 layoffs at Amazon, according to CEO Andy Jassy.

“I’m writing to share that we intend to eliminate about 9,000 more positions in the next few weeks—mostly in AWS, PXT, Advertising, and Twitch,” Jassy said in a message to employees said.

“This was a difficult decision, but one that we think is best for the company long term," he said.

Earlier this year, Amazon unveiled it would lay off 18,000 employees.

At the time, CRN learned that AWS would not be significantly impacted by the round of layoffs.

However, the worldwide cloud market share leader will now see employee layoffs in Amazon’s new round of cuts.

Jassy said a “second phase” of internal business evaluations has led the company to make the decision to cut the additional 9,000 employees.

“Some may ask why we didn’t announce these role reductions with the ones we announced a couple months ago,” Jassy said.

“The short answer is that not all of the teams were done with their analyses in the late autumn; and rather than rush through these assessments without the appropriate diligence, we chose to share these decisions as we’ve made them so people had the information as soon as possible," Jassy added.

"The same is true for this note as the impacted teams are not yet finished making final decisions on precisely which roles will be impacted.”

Jassy said the goal is to have those decisions made by mid- to late-April.

He did not specify exactly how many of the 9,000 employees terminations would come specifically from AWS.

Jassy remains "optimistic" about AWS

Andy Jassy, who was previously chief executive of AWS before heading up parent Amazon in 2021, said he’s still optimistic about the cloud giant's future even with the cuts.

“I remain very optimistic about the future and the myriad of opportunities we have, both in our largest businesses, Stores and AWS, and our newer customer experiences and businesses in which we’re investing,” Jassy said.

As of the fourth quarter 2022, AWS is the global cloud market share leader at 33 per cent worldwide share, followed by Microsoft at 23 per cent share, then Google at 11 per cent share.

AWS generated US$21.38 billion in sales during the fourth quarter 2022, representing a growth rate of 20 per cent year over year.

This marked one of AWS’ slowest sales growth rates in recent years.

For example, in fourth quarter 2021, AWS sales increased 40 per cent year over year.

During its recent third quarter 2022, AWS revenue increased 28 per cent year over year.

Operating income was US$5.2 billion for AWS in fourth quarter 2022, compared to US$5.3 billion in fourth quarter 2021.


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