AWS has announced it will cut hundreds of jobs across several areas of the business as the cloud giant looks to cut costs and “streamline” operations.
The hyperscaler revealed that several hundred positions spanning its global sales, marketing and services organization, as well as a few hundred more from its brick-and-mortar technology team, will be eliminated during the layoffs.
A good portion of the cuts are in training and certification, as well as sales operations, with the company citing a shifting focus toward self-service digital training and third-party training programs.
“We have identified some specific areas of the organization that we need to optimize to continue to focus our efforts on the key strategic areas that we believe will drive the maximum impact,” an AWS spokesperson said. ITPro.
“These decisions are difficult but necessary as we continue to invest, hire and optimize resources to deliver innovation to our customers,” the spokesperson added.
AWS appears keen to establish a clear narrative around the layoffs, suggesting the move is primarily aimed at driving growth and streamlining operations.
According to GeekWire, AWS Senior Vice President of Marketing and Sales Matt Garman wrote that while the company “does not make these decisions lightly,” it also operates in an “incredibly fast-changing industry.”
“It is important that we remain agile as an organization,” he added. “The changes we are making are future-proofing the organization, aligning it with our strategy and priorities, and reducing duplication and inefficiency.”
AWS said ITPro that while it was eliminating roles, it was also “hiring for priority” in other areas and, where possible, locating internal opportunities for employees affected by the layoffs.
AWS cuts point to challenging operating environment
Streamlining operations may not be the only contributing factor here, according to Lee Sustar, principal analyst at Forrester.
Sustar said post-pandemic market conditions combined with fierce competition with industry counterparts could have driven the decision to reduce headcount.
“AWS has been adapting to customers' cost-reduction efforts following the increase in cloud IT spending during the pandemic, helping them in that process,” Sustar said. “The resulting moderation in demand is a factor in these layoffs.”
Sustar suggested that with “enterprise cloud spending on AI” flowing to competitors like Microsoft, AWS could worry about slowing demand for services.
“Challengers like Oracle Cloud Infrastructure and AI-focused cloud startups” also appear to be putting pressure on the cloud giant.
According to Synergy researchAmazon's market share fell to 31% in Q4 2023 despite growth, while The most recent data from Canalys pointed to AWS as showing the least amount of growth. of the three big hyperscalers.
That said, Canalys' research still puts AWS well ahead of the competition. These recent layoffs show that companies are committed to staying on top of that trend by any means necessary.
A trend in AWS cost reduction tactics
The news of these layoffs follows a previous round of cuts in early 2023 in which AWS confirmed that it would eliminate 9,000 roles.
This round of cuts followed an earlier elimination of 18,000 positions by parent company Amazon in January last year.
At the time, the cloud giant attributed the layoffs to pandemic-era overhiring and the need to adapt to changing market conditions. Amazon CEO Andy Jassy said the company was focused on becoming “more efficient.”
However, concerns about a disastrous downturn in the cloud sector have since eased amid a resurgence in business spending. March reports predicted a 20% increase in cloud spending through 2024 and beyond.
