Amazon announced that it will lay off an additional 9,000 employees. Amazon CEO Andy Jassy also confirmed that the cloud division, Amazon Web Services (AWS), will be among those laid off today. AWS is accounting for approximately 10% of all layoffs. However, the company has not confirmed these figures.
These layoffs are in addition to the previously announced layoffs, which began in November and continued into January. This round affected more than 18,000 employees, primarily in the retail, devices, recruiting, and human resources departments.
Jassy explained in a memo to employees that the reason for the staged layoffs was that some managers were still evaluating their departments and were not ready for the first round. According to the memo, “The overriding tenet of our annual planning this year was to be leaner while doing so in a way that enables us to still invest robustly in the key long-term customer experiences that we believe can meaningfully improve customers’ lives and Amazon as a whole,”
According to Ray Wang, founder and principal analyst at Constellation Research, Amazon had to scrutinize every aspect of the organization, including AWS. While according to Jassy’s memo, the latest round will primarily affect Amazon’s cloud computing, human resources, advertising, and Twitch livestreaming businesses.
The cloud division’s growth rate was 20% in the company’s most recent earnings report, released at the beginning of last month, down from 39% the previous year. Furthermore, CFO Brian Olsavsky stated that growth was slowing even more. “As we look ahead, we expect these optimization efforts will continue to be a headwind to AWS growth in at least the next couple of quarters. So far in the first month of the year, AWS year-over-year revenue growth is in the mid-teens,” he said at the time.
The sources for this piece include articles in TechCrunch and Reuters.