AWS Confirms Layoffs Impacting ‘Single Digit Percentage’ Of Employees

“These role eliminations only impact a small, single-digit percentage of AWS employees,” AWS confirmed to CRN. Here’s what you need to know about Amazon’s latest 9,000-layoff round at AWS.

Amazon Web Services confirmed to CRN that Amazon’s latest 9,000 employee layoff round will impact a “small, single-digit percentage” of AWS employees.

Furthermore, AWS told CRN that the $85 billion worldwide cloud market share leader will still have more employees in 2023 than it had in 2021.

“AWS headcount is higher now than it was in 2021 due to rapid growth,” said AWS in a statement to CRN. “These role eliminations only impact a small, single-digit percentage of AWS employees.”

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Like many tech companies announcing massive layoffs, AWS pointed to a rapid hiring spree last year as a key reason for why it will be laying off AWS employees.

AWS declined to say how many people it employs globally.

AWS’ parent company Amazon employs approximately 1.5 million people, which includes AWS employees.

One CEO from a national solution provider who partners with AWS, said it was “somewhat reassuring” that AWS confirmed only a small single-digit percentage of employees will be laid off. The CEO, who declined to be identified, is seeing AWS laying off employees who were recently hired.

“What I’m seeing online and what we’re hearing from inside AWS is that a lot of the people they’re letting go right now were hired last year or in 2021, and a lot of recruiters,” said the CEO. “I don’t see layoffs on the channel side right now. Our [AWS] channel [reps] and some of the partners we talk too all the time haven’t seen eliminations yet.”

Amazon’s 27,000 Layoffs

Last month, Amazon disclosed that it will be cutting a total of 9,000 employees by mid- to late-April.

The cuts would primarily come from its AWS, PXT, advertising and Twitch organizations, said Amazon CEO Andy Jassy, who was previously CEO of AWS until 2021.

“Given the uncertain economy in which we reside, and the uncertainty that exists in the near future, we have chosen to be more streamlined in our costs and headcount,” said Jassy in a letter to employees on March 20. “This was a difficult decision, but one that we think is best for the company long term.”

In January, Amazon also said it would lay off 18,000 employees. CRN learned at the time that AWS would not be greatly affected by that round of layoffs. However, Amazon’s newest 9,000 layoff round is impacting AWS employees.

This means within the first few months of 2023, Amazon will have terminated a whopping 27,000 employees with at least hundreds, if not potentially thousands, coming via AWS.

Amazon’s CEO said the goal of this year’s annual planning was to make his company leaner while also enabling Amazon to still invest in key long-term customer experiences.

“This initially led us to eliminate 18,000 positions (which we shared in January); and, as we completed the second phase of our planning this month, it led us to these additional 9,000 role reductions,” said Jassy. “Though you will see limited hiring in some of our businesses in strategic areas where we’ve prioritized allocating more resources.”

AWS Profitability Inside Amazon

AWS is the most profitable business within Amazon.

In its most recent fourth quarter 2022, Amazon’s operating income was $2.7 billion, while AWS’ operating income was $5.2 billion for the fourth quarter. This means AWS was the main reason why Amazon wasn’t operating in the red during its most recent quarter.

For all of 2022, Amazon sales increased only 9 percent compared to 2021, while AWS sales jumped nearly 30 percent annually to over $80 billion.

AWS told CRN that its layoffs are based on “reprioritization decisions” and AWS is excited about the future.

“The role reductions in AWS were driven by reprioritization decisions, which required us to reallocate resources,” said an AWS spokesperson to CRN. “In most cases this involved people shifting projects, priorities or teams, but in some cases we didn’t have the right skill match for these priorities.”