Amazon Announces Layoffs in HR and Cloud Units

On Wednesday, Amazon initiated the process of laying off certain employees who were working in its human resources and cloud computing departments. The Chief Executive Officer of Amazon Web Services, Adam Selipsky, and the Head of Human Resources, Beth Galetti, both sent out messages to their teams based in the United States, Canada, and Costa Rica, informing them of the impending job cuts.

In a memo sent out to staff in the U.S., Canada, and Costa Rica, Amazon Web Services CEO Adam Selipsky and HR head Beth Galetti confirmed the ongoing layoffs in the cloud computing and human resources divisions. The job cuts are part of a previously announced plan to reduce the workforce by 9,000 employees. The memo acknowledged the difficult day for the organization, as Amazon has already laid off employees in other units such as advertising, video games, and Twitch livestreaming over the past few weeks.

Earlier this year, Amazon completed a distinct round of job cuts that impacted roughly 18,000 employees. When added to the cuts taking place this month, these layoffs constitute the most substantial reduction in the company’s workforce since its inception 29 years ago.

In response to an economic downturn and slowing growth in its core retail business, Amazon’s CEO Andy Jassy has been implementing aggressive cost-cutting measures across the company. This includes freezing hiring in its corporate workforce, discontinuing some experimental projects, and slowing down warehouse expansion.

With the announcement of layoffs in the advertising and Amazon Web Services (AWS) divisions, CEO Andy Jassy has made it clear that even two of Amazon’s largest and most profitable businesses are not exempt from cost-cutting measures. Both AWS and advertising have faced slower growth as companies reduce spending during a challenging economic climate.

An anonymous employee familiar with the matter revealed that some teams within Amazon Web Services (AWS) were affected in the previous round of layoffs. The current round of layoffs on Wednesday is expected to impact AWS’ professional services division, which assists customers in resolving issues with their cloud infrastructure. The employee requested anonymity as they were not authorized to comment on the matter.

During the Covid pandemic, the headcount in AWS increased significantly, benefiting Amazon and other cloud providers, as businesses, government agencies, and schools rapidly transitioned to the cloud.

Selipsky wrote in the memo that due to the fast growth of the company and the current economic environment, it’s important to identify and prioritize the things that are most important to customers and will drive the business forward. This has resulted in some team members shifting projects, initiatives, or teams, while in other cases, role eliminations were necessary.

After the bell on Thursday, Amazon is expected to report its first-quarter earnings. Investors will scrutinize the report for indications of improved profitability following Jassy’s cost-cutting measures and when Amazon executives anticipate a rebound in AWS growth. On Wednesday, Amazon shares rose more than 3% during afternoon trading.