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AWS cuts several hundred jobs to tackle ‘inefficiency’ as customer cloud cost-cutting continues

Public cloud giant AWS is embarking on another round of job cuts, with analysts citing the fact it’s losing ground to Microsoft in the AI race

Amazon Web Services (AWS) has made another round of job cuts, with several hundred tech and sales staff understood to be affected, according to media reports.

A report on the GeekWire news site said employees were informed of the decision via email on 3 April by AWS senior vice-president Matt Garman, with individuals working in the firm’s training, certification and sales operations known to be most affected.

This is because, according to the report, AWS is looking to outsource the running of its training programmes to external third parties and focus more on self-study certifications.

“We do not take these decisions lightly, and I know change can be difficult,” wrote Garman. “We operate in an incredibly fast-moving industry, and it is important that we stay agile as an organisation.

“The changes we are making are preparing the organisation for the future, aligning with our strategy and priorities, and reducing duplication and inefficiency.”

In a statement shared with Computer Weekly, an AWS spokesperson further stated. “We’ve identified a few targeted areas of the organisation we need to streamline ... to continue focusing our efforts on the key strategic areas that we believe will deliver maximum impact,” they said.

“We didn’t make these decisions lightly, and we’re committed to supporting the employees throughout their transition to new roles in and outside of Amazon. These decisions are difficult but necessary as we continue to invest, hire and optimise resources to deliver innovation for our customers.”

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News of the latest round of job cuts has emerged just over a year after Amazon CEO Andy Jassy emailed staff to confirm 9,000 jobs would be lost across AWS, its live-streaming service Twitch, the Amazon People Experience and Technology Solutions (PXT) division, and its advertising arm.

The company was one of several high-profile tech firms to go on a sizeable hiring spree during the Covid-19 pandemic in early 2020, in response to organisations around the world having to embrace cloud technologies to enable social distancing-mandated remote working setups.

Lee Sustar, principal analyst at IT market watcher Forrester, said news of the job cuts are a response by Amazon to growing competition and changing customer attitudes towards cloud purchases.

On this point, the most recent run of AWS financial results have repeatedly made reference to the fact that large portions of the company’s customer base are working to a cost-optimisation agenda when it comes to managing their cloud estates, and he said the lay-offs are a consequence of that.  

“AWS has been adapting to customers’ cost-cutting efforts following the spike in cloud IT spending during the pandemic, assisting them in that process,” said Sustar.

“The resulting moderation of demand is a factor in these lay-offs as well as enterprise cloud spending on artificial intelligence [AI] flowing to Microsoft Azure, challengers like Oracle Cloud Infrastructure and new AI-focused cloud companies.”

Where the latter is concerned, AWS has moved to make investments of its own in the AI space, including its decision to take a $4bn minority stake in AI safety startup Anthropic, which also saw the cloud giant become the firm’s “primary cloud provider for mission-critical workloads”.

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