Workers at Amazon Web Services will not be significantly affected by Amazon’s 18,000 layoffs this month, although AWS remains on hiatus in hiring, according to sources.
Amazon’s popular cloud business, Amazon Web Services, is not significantly affected by the round of 18,000 layoffs Amazon announced last week, according to multiple sources, although AWS remains on a hiring hiatus.
“It affects Amazon as opposed to AWS,” said one senior executive at an AWS partner familiar with the matter, who spoke on condition of anonymity. “The number of layoffs for AWS makes no sense.”
AWS is Amazon’s $80 billion cloud computing business, and it has grown revenue faster than its parent company over the past few years as demand for its cloud services has grown.
When contacted, AWS declined to comment on whether the 18,000 layoffs at Amazon would affect AWS employees. Instead, the Seattle-based company pointed CRN to a memo sent to employees by Amazon CEO Andy Jassy, the former CEO of AWS.
“Several teams are affected; however, the majority of role removals are in our Amazon Stores and PXT [People, Experience and Technology] organizations,” said Jassy.
[Related: Salesforce Layoffs: Poor Earnings, CEO Departure, Hiring strategy Led To Massive Cuts]
PXT is Amazon’s human resources department.
Amazon will begin communicating with affected employees on January 18, and layoffs are expected in the coming weeks.
During the AWS Hiring Break
While AWS hasn’t seen any significant layoffs, sources said AWS is currently holding back most of its hiring.
“AWS has a confirmed hiatus in hiring for most roles,” said a CEO of one of AWS’s top partners, speaking on condition of anonymity. “This has had an impact on AWS’s recruiting teams—clearly, less resources are needed to recruit talent if there is a hiring break.”
AWS remains in a hiring freeze through the end of 2022.
The CEO said he was told AWS was extremely bullish on using partners as part of a “hiring hiatus.” They know that companies like ours have not stopped hiring.”
Although Amazon has more than 1.5 million employees, it is not officially disclosed how many thousands of employees are employed by AWS.
As of Monday morning, Amazon Web Services had about 200 open jobs worldwide on its website.
Most jobs are in AWS systems development engineers and software development with positions spanning the globe.
AWS is a Top Priority at Amazon
During AWS’s most recent quarterly earnings report, Amazon CFO Brian Olsavsky said AWS is a top priority for Amazon and the company will continue to invest heavily in it.
“We continue to grow our investment in AWS, adding product developers, sales and professional services to help customers save money, invest in their businesses faster and move to the cloud,” Olsavski said in November.
AWS has consistently grown sales faster than parent company Amazon.
For example, in the third quarter of 2022, AWS sales grew 28 percent year-over-year to $20.5 billion, representing higher revenue growth than Amazon’s 15 percent year-over-year growth.
Amazon CEO Jassy was AWS CEO from 2003 to 2021, when he succeeded Jeff Bezos.
On Jan. 4, he said that between AWS’ cuts in November 2022 and those set for early 2023, just over 18,000 roles will be eliminated at Amazon.
“The S-team and I know deeply that removing these roles is difficult for people, and we do not take these decisions lightly or underestimate the impact they can have on the lives of those affected,” Jassy said.
“Amazon has struggled through uncertain and challenging economies in the past, and we will continue to do so,” he said. “These changes will help us realize our long-term opportunities with a stronger cost structure; However, I am also optimistic that we will be inventive, resourceful and nimble in this era where we are not hiring extensively and eliminating some roles.”
Amazon is expected to report financial results for the fourth quarter of 2022 in late January or early February.