AWS has announced it will cut hundreds of jobs across several areas of the business as the cloud giant looks to reduce costs and ‘streamline’ operations.
The hyperscaler revealed several hundred roles spanning its sales, marketing, and global services organization will be cut in the layoffs, as well as a few further hundred from its Physical Stores Technology team.
A good share of the cuts are in training and certification, as well as sales operations, with the company citing a shifting focus towards self-serve digital training and external training programs.
"We've identified a few targeted areas of the organization we need to streamline in order to continue focusing our efforts on the key strategic areas that we believe will deliver maximum impact,” an AWS spokesperson told ITPro.
“These decisions are difficult but necessary as we continue to invest, hire, and optimize resources to deliver innovation for our customers,” the spokesperson added.
AWS appears keen on establishing a clear narrative about the layoffs, suggesting that the move is aimed primarily at driving growth and simplifying operations.
According to GeekWire, AWS marketing and sales SVP Matt Garman wrote that though the company does “not take these decisions lightly”, it also operates in an “incredibly fast-moving industry”.
“It is important that we stay agile as an organization,” he added. “The changes we are making are preparing the organization for the future, aligning with our strategy and priorities, and reducing duplication and inefficiency.”
AWS told ITPro that while it was eliminating roles, it was also “hiring for priorities” in other areas and, wherever possible, locating internal opportunities for employees affected by the layoffs.
AWS cuts point to a challenging operating environment
Streamlining operations may not be the only contributing factor here, according to Lee Sustar, principal analyst at Forrester.
Sustar said that post-pandemic market conditions combined with fierce competition with industry counterparts could have prompted the decision to reduce headcount.
“AWS has been adapting to customers’ cost-cutting efforts following the spike in cloud IT spending during the pandemic, assisting them in that process,” Sustar said. “The resulting moderation of demand is a factor in these layoffs.”
Sustar suggested that with “enterprise cloud spending on AI” flowing toward competitors such as Microsoft, AWS could be concerned about slowing demand for services.
“Challengers like Oracle Cloud Infrastructure and new AI-focused cloud companies” also appear to be placing pressure on the cloud giant.
According to research from Synergy, Amazon’s market share dipped to 31% in the fourth quarter of 2023 despite growth, while more recent data from Canalys pointed towards AWS as showing the smallest amount of growth out of the big three hyperscalers.
That being said, Canalys’ research still put AWS way out ahead in front of the competition. These recent layoffs show the firms committed to stay on top of that trend by any means necessary.
A trend in AWS’ cost-cutting tactics
News of these layoffs follows a previous round of cuts during early 2023 in which AWS confirmed it would eliminate 9,000 roles.
This round of cuts followed a previous erasure of 18,000 roles 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 “leaner”.
Since then, however, concerns about a disastrous cloud sector decline have eased amid resurgent enterprise spending. Reports from March predicted a 20% surge in cloud spending across 2024 and beyond.
