Amazon: AWS Layoffs Driven By ‘Reprioritization Decisions’
‘The role reductions at AWS were driven by reprioritization decisions, which required us to reallocate resources,’ AWS tells CRN.
Amazon Web Services told CRN that its recent layoff round is based on “reprioritization decisions,” adding that the cloud computing leader is “very excited” about its future.
Amazon unveiled on Monday that it will be laying off 9,000 employees, including many from AWS, the world’s largest cloud computing company.
“The role reductions in AWS were driven by reprioritization decisions, which required us to reallocate resources,” said an AWS spokesperson to CRN. “In most cases this involved people shifting projects, priorities, or teams, but in some cases we didn’t have the right skill match for these priorities.”
[Related: Amazon’s AWS Layoffs: 5 Things To Know About ‘Devastating’ Cuts]
Even with potentially the largest layoff round in AWS’ history, the Seattle-based company told CRN it continues to be bullish about the future.
“We continue to be very excited and optimistic about our AWS business, which continues to have very strong pipeline, migration, and fundamentals, even in a challenging economic environment,” AWS told CRN.
When asked how many AWS employees would be affected by Amazon’s 9,000 layoffs, the company declined to answer.
AWS also declined to say which business units or organizations would see a reduction in staff.
“We intend to eliminate about 9,000 more positions in the next few weeks—mostly in AWS, PXT, Advertising, and Twitch,” said Amazon CEO Andy Jassy in a message to employees on Monday. “This was a difficult decision, but one that we think is best for the company’s long term.”
In January, Amazon unveiled it would lay off 18,000 employees. CRN learned at the time that AWS would not be significantly affected by the round of layoffs. However, Amazon’s new round of employee terminations will undoubtedly affect AWS.
‘Amazon Should Do Better’
Monday’s news of 9,000 layoffs at Amazon sent shockwaves through the technology world. Many Amazon and AWS employees took to social media platform LinkedIn to voice their concerns.
“We’ve been impacted by three separate rounds of layoffs since November. It’s gut-wrenching to lose co-workers,” wrote Becky Brownlee, Amazon product and strategy leader who works in People Experience & Tech (PXT) in a LinkedIn post, which had over 160 comments.
“As an added bonus, those of us that were fortunate enough to keep our jobs have had to absorb an unmanageable amount of work,” she said. “I understand the need to cut costs, but dragging this out over 6 months is torture. Not pulling back on priorities with reduced staff demonstrates poor leadership. Amazon can and should do better.”
William Bryan, AWS’ supply chain global security leader, added that Tuesday is a “bleak day” for his company.
AWS Is A Profit Driver For Amazon
AWS is an $85 billion cloud computing global leader that is growing faster and is more profitable than its parent company Amazon.
For example, in its most recent fourth quarter 2022, Amazon’s overall operating income was $2.7 billion. AWS’ operating income was $5.2 billion, meaning AWS is the reason why Amazon wasn’t operating in the red.
In 2022, Amazon’s sales increased 9 percent annually, while AWS revenue jumped nearly 30 percent year over year to over $80 billion.
AWS owns 33 percent share of the worldwide cloud infrastructure services market, which hit nearly $62 billion in the fourth quarter of 2022 alone, according to data from IT research firm Synergy Research Group.
Microsoft ranks No. 2 in global cloud services market share at 23 percent share, followed by Google via Google Cloud at No. 3 with 11 percent market share.