Amazon Starts Layoffs in AWS Cloud Division

Amazon.com Inc. has begun laying off workers in its cloud services sector as sales growth in its most profitable division slows. 

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Amazon Web Services employees in the United States, Canada, and Costa Rica who were laid off were told early Wednesday, according to the unit's head in an email to employees. AWS contributes the majority of the company's revenues, but its growth is slowing as corporate clients attempt to cut costs.

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Overall, Amazon is cutting 27,000 jobs, largely in corporate, after a hiring frenzy during the epidemic left the business with too many employees. Following a series of layoffs that totaled over 18,000 people earlier this year, Amazon announced additional 9,000 layoffs in March, which Chief Executive Officer Andy Jassy claimed will affect AWS, human resources, 

advertising, and the Twitch livestreaming service. Cuts have been implemented in recent weeks in sectors such as Twitch and the company's video game division. 

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"It is a difficult day across our organization," AWS CEO Adam Selipsky wrote in an email.

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AWS, like most of Amazon, rapidly increased its workforce as the epidemic increased demand for digital services. 

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"Given this rapid growth, as well as the overall business and macroeconomic climate, we must focus on identifying and putting our resources behind our top priorities—those things that matter most to customers and will move the needle for our business," Selipsky added. "In many cases, this means that team members are shifting the projects, initiatives, or teams on which they work; however, in other cases, this has resulted in these role eliminations."

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Selipsky said cutbacks in places other than North America will be implemented through local processes, including talks with employee organizations where required by law. 

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Some AWS-related teams had previously been laid off, including recruiters and employees of the "Just Walk Out" physical retail technology department, which joined the division in a restructuring last year. However, the company's recruitment and human resources teams, as well as its huge retail group and gadgets teams, bore the brunt of the initial round of layoffs. 

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More layoffs were announced Wednesday for Amazon's troubled HR department, which has been subjected to waves of buyout offers and layoffs since November. 

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Beth Galetti, who oversees Amazon's People Experience and Technology team, revealed the latest round of layoffs in an email on Wednesday. "These decisions are not made lightly, and I am aware of the impact they will have on both those leaving the company and our colleagues who remain," she added. 

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An Amazon spokeswoman declined to comment on the new layoffs, citing Jassy's email in March announcing their impending arrival. 

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Amazon has implemented a hiring freeze for employment outside of its warehouses and shipping operations, with exceptions for certain projects and occupations, and management says it's unclear when the business would resume mass hiring. 

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At the end of December, Amazon employed 1.54 million workers globally. The great majority of such jobs are hourly warehouse workers who pack and distribute merchandise. The corporation stated that it had around 350,000 corporate workers when the first round of layoffs occurred in November. 

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Other major giants that have cut staff include Meta Platforms Inc., Alphabet Inc., the parent company of Google, Microsoft Corp., Dell Technologies Inc., and International Business Machines Corp.

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Amazon is set to release financial results on Thursday, and investors will be looking to see if cost-cutting initiatives have improved profitability and if cloud services sales growth has peaked.

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