Amazon Web Services (AWS) is making what one analyst characterized as a “belated, but necessary” update to its employee management system, deploying new software designed to streamline hiring and help it keep better tabs on headcount. The move comes as the company faces a slowdown in cloud growth that drove a swell in corporate ranks during the pandemic.
The software in question is a centralized internal tool called Roster, which has been in development at the company for more than a year. News of the rollout was first reported by Fortune.
An Amazon representative confirmed it is implementing Roster in an email to Silverlinings, characterizing the move as a regular process improvement. “Roster is a position-based management tool that improves the hiring process across the organization for both candidates and hiring managers,” the representative wrote.
Earlier this month, AWS employees felt the burn as previously announced layoffs at the company hit its cloud division. But Hyoun Park, CEO and chief analyst at Amalgam Insights, told Silverlinings that the Roster rollout is probably more about “managing attrition” than supporting layoffs.
“In light of adjusting from the 30+% growth of the Covid era to the more realistic 10-15% growth that mature IT cloud companies like Amazon and Salesforce are now facing, Amazon needs to show more cost control,” he said.
The people management problem
Personnel management is a big deal for Amazon, given it had more than 1.5 million full and part-time employees scattered across its different divisions as of December 31, 2022.
Park noted that Amazon streamlined its employee management system a few years back, inking a deal with Workday in 2016 to transition away from Oracle’s PeopleSoft software. However, Workday announced in July 2021 that Amazon decided to end that relationship. That left the company without a unified people management system to manage its growing pool of talent.
“It is currently considered good practice to manage a workforce to align supply and demand not only from a personal perspective, but also from a skill specific perspective,” Park explained. “By using a system designed to provide a single source of truth for workforce management, Amazon would expect to be able to achieve this alignment and finally rationalize their workforce to match corporate demand.”
In Q1 2023, Amazon’s consolidated revenue rose 9% year on year to $127.4 billion. AWS sales jumped 16% year on year to $21.4 billion, but this pace of growth was significantly below the 37% year on year growth the division posted in Q1 2022.
Park concluded AWS’ Roster implementation “should be seen as a belated, but necessary move for Amazon to return to the world of reality in terms of running a business in a way that most businesses need to be run to be profitable without counting on 40% year-over-year growth.”
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