AWS layoffs on the way as Amazon cuts 9,000 employees

"I’m writing to share that we intend to eliminate about 9,000 more positions in the next few weeks—mostly in AWS, PXT, Advertising, and Twitch", says Amazon CEO Andy Jassy

The world leader in cloud computing, Amazon Web Services, is going to be impacted by a new round of 9,000 layoffs at Amazon, according to CEO Andy Jassy.

"I'm writing to share that we intend to eliminate about 9,000 more positions in the next few weeks—mostly in AWS, PXT, Advertising, and Twitch," said Jassy in a message to employees yesterday.

"This was a difficult decision, but one that we think is best for the company long term."

Earlier this year, Amazon unveiled it would axe 18,000 employees.

At the time, CRN learned that AWS would not be significantly impacted by the round of layoffs. However, the Seattle-based worldwide cloud market share leader will now see employee layoffs in Amazon's new round of cuts.

Jassy said a "second phase" of internal business evaluations has led the company to make the decision to cut the additional 9,000 employees.

"Some may ask why we didn't announce these role reductions with the ones we announced a couple months ago," Jassy said.

"The short answer is that not all of the teams were done with their analyses in the late fall; and rather than rush through these assessments without the appropriate diligence, we chose to share these decisions as we've made them so people had the information as soon as possible.

"The same is true for this note as the impacted teams are not yet finished making final decisions on precisely which roles will be impacted."

Jassy said the goal is to have those decisions made by mid- to late-April.

He did not specify exactly how many of the 9,000 employees terminations would come specifically from AWS.

Jassy remains ‘optimistic' about AWS

Andy Jassy, who was previously CEO of AWS before becoming Amazon's CEO 2021, said he's still optimistic about AWS' future even with the cuts.

"I remain very optimistic about the future and the myriad of opportunities we have, both in our largest businesses, Stores and AWS, and our newer customer experiences and businesses in which we're investing," said Jassy.

As of the fourth quarter 2022, AWS is the global cloud market share leader at 33 per cent worldwide share, followed by Microsoft at 23 per cent share, then Google at 11 per cent share.

AWS generated $21.38bn in sales during Q4 2022, representing a growth rate of 20 per cent year on year.

This marked one of AWS' slowest sales growth rates in recent years. For example, in Q4 2021, AWS sales increased 40 per cent year on year. During its recent third quarter 2022, AWS revenue increased 28 per cent year on year.

Operating income was $5.2bn for AWS in Q4 2022, compared to $5.3bn in fourth quarter 2021.