Update: Amazon begins AWS unit layoffs promised in mid-March

April 26, 2023 -- Update: Amazon has begun layoffs to its HR and AWS units. 

On the heels of Google Cloud and Microsoft beating Wall Street estimates for their first quarter earnings, Amazon began layoffs in its human resources and Amazon Web Services (AWS) cloud division. 

According to CNBC, last week the tech powerhouse laid off folks in advertising, and had already let go people from its Twitch live-streaming service as well.

These layoffs are all part of the previously announced 9,000 job cuts, which are on top of an initial round of 18,000 cuts announced in January.

It has been a challenging year for AWS as its customers look to maximize their cloud spend in a tight economy, according to an April 13, 2023, shareholder letter from Amazon CEO Andrew Jassy. 

"Despite growing 29% year-over-year (“YoY”) in 2022 on a $62B revenue base, AWS faces short-term headwinds right now as companies are being more cautious in spending given the challenging, current macroeconomic conditions. While some companies might obsess over how they could extract as much money from customers as possible in these tight times, it’s neither what customers want nor best for customers in the long term, so we’re taking a different tack," he wrote.

"One of the many advantages of AWS and cloud computing is that when your business grows, you can seamlessly scale up; and conversely, if your business contracts, you can choose to give us back that capacity and cease paying for it. This elasticity is unique to the cloud, and doesn’t exist when you’ve already made expensive capital investments in your own on-premises datacenters, servers, and networking gear. In AWS, like all our businesses, we’re not trying to optimize for any one quarter or year. We’re trying to build customer relationships (and a business) that outlast all of us; and as a result, our AWS sales and support teams are spending much of their time helping customers optimize their AWS spend so they can better weather this uncertain economy."

Amazon reports its Q1 2023 earnings tomorrow, April 27, 2023, after the market closes.

Despite the layoff news, the company stock (AMZN) was trading at $104.98, up 2.35% at market close.

March 20, 2023 -- AWS to cut jobs as part of a wider layoff at Amazon

Amazon is planning to layoff another 9,000 employees, including an unspecified number from its market-leading Amazon Web Services (AWS) cloud division.

The cloud unit hadn’t been included in Amazon’s previous round of 18,000 job cuts, which were announced in January. Amazon CEO Andy Jassy said on the corporate blog that the company didn’t announce this latest round of cuts then because not all of the teams had completed their assessments in late fall.

Now it has been decided that the axe will fall at AWS, as well as human resources, advertising, and the Twitch livestreaming unit. The news follows last weeks announcement that Twitch's CEO Dan Clancy was resigning.

“Given the uncertain economy in which we reside, and the uncertainty that exists in the near future, we have chosen to be more streamlined in our costs and headcount,” the CEO wrote. “The overriding tenet of our annual planning this year was to be leaner.”

AWS is currently the largest cloud service provider in the world. It has a 33% share of the market according to Synergy Research Group.

Evidently, this is not enough to save the unit from the corporate claws at Amazon. Jassy expects that the final decisions on which roles will be cut will be done by late April. 

Silverlinings reached out to AWS for comment but company representatives had nothing additional to add beyond Jassy's blog.