Cloud engineers are the canary in the coal mine for layoffs

If you want to know how an organization – especially a cloud provider – is performing, look to their cloud service engineers. The DevOps model used by most cloud giants means their engineers have a ringside seat to all the customer action, meaning their decisions to stay with the company or jump ship can be something of a bellwether for how certain projects and even the company overall is doing. 

The tech segment was recently jolted by hefty layoffs nearly across the board, with Amazon, Microsoft and Google parent Alphabet each laying off 10,000 or more employees. But whispers have been swirling that an exodus of cloud and networking engineers began well before the axe fell.  

For instance, Aviatrix CEO Steve Mullaney recently told Silverlinings the company saw an influx of networking talent from Google ahead of the layoffs announced in January. And a source from a consulting firm who requested anonymity to discuss a sensitive subject with Silverlinings said that’s probably because the smart ones saw the writing on the wall.  

The source said there’s always been chatter lurking in the background about what cloud providers would do if the explosive demand for the cloud services seen during the pandemic began to ebb. And of course, ebb it has, with Microsoft and Amazon both outright stating in recent earnings calls that customers are looking to optimize their cloud costs.  

Employees inside these companies working on cloud services teams would have seen the drop in consumption and spending relative to expectations well before it was announced, the source said. They’d also have an inside view of the adoption of different cloud offers and instances – a view which in a traditional organization would be obscured for most and only visible to sales staff. Failed adoption and monetization would serve as a tip off that cuts were likely on the way in certain segments.

The layoff leap

Mitch Connors left Google in November 2022 to take a role as Open Source Lead at Aviatrix. He told Silverlinings he's one of roughly seven staffers who made the leap from Google to the startup over the past year, with about half of these coming from Google's open source networking team like him. 

He said it's true that from his position as a software engineer he could tell that the Istio project he was working on — while dominant in the open source realm — wasn't delivering a lot of profitability for Google. But he added at the time he left there were no layoff rumors and he never would have guessed that such widespread cuts were on the way. His decision to leave, Connors said, was more about career path: Google just wasn't as interested in open source as he was. He's now working on the same Istio project, but for Aviatrix. 

The consulting source said professional ambitions are part of the calculation when engineers weigh whether to leave a company. There’s one other consideration that might push cloud employees to leave before layoffs begin: stock incentives. The source noted that those with vested options weigh whether the stock has stagnated and whether they might actually end up with less value by sticking around rather than cashing out before getting the boot.

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