Oracle to Salesforce, Cloud Layoffs Have Started — Will They Continue?
In recent weeks, we've also seen cuts at Tencent and SADA. We break down why.
![Layoffs, unemployed Layoffs, unemployed](https://eu-images.contentstack.com/v3/assets/blt10e444bce2d36aa8/blt3c9b06d0c73e7513/65240fee20b29b5b5d326882/1-Layoffs.jpg?width=700&auto=webp&quality=80&disable=upscale)
Shutterstock
Amazon stands out as the latest tech company preparing to lay off a significant number of staff. On Monday, The New York Times reported that the retail giant will enact the largest job cuts in company history — 10,000 in all, although the number could change.
Most of the layoffs will come in the device division (that group develops Alexa). The retail unit and human resources also will be hit, per the Times. We asked a spokesperson at Amazon Web Services whether layoffs will come inside the cloud computing behemoth, too.
“AWS is not commenting on these rumors right now,” the spokesperson told us.
In instances on LinkedIn, Amazon Web Services contractors say that their contracts have “ended sooner than expected.”
AWS remains, like the rest of Amazon, under a hiring freeze. According to CIODive (Channel Futures’ sister site), AWS alone had more than 9,000 open jobs listed on its site early this month. As of Nov. 15, that number had dwindled to 1,525.
AWS delivers some of Amazon’s overall biggest profits. Those numbers slowed in the third quarter. AWS grew 27% year-over-year in the most recent quarter, down from 39% the same period a year earlier. AWS is still making money, no doubt. The cloud computing division recorded more than $20.5 billion in net sales in the three months ending Sept. 30. But those numbers don’t bolster the rest of the organization and the slowdown in growth is contributing to the decrease in open jobs.
Amazon, overall, reported third-quarter earnings that so spooked investors, the company lost its trillion-dollar market cap. That last happened in April 2020. CNBC notes that Amazon’s stock is on pace for its worst year since 2008.
Oracle Cloud Infrastructure has been coming in hot in the cloud world, gaining customers and brand recognition. But two weeks after the company’s giant event in Las Vegas, word broke that 200 layoffs had taken place.
“We are currently in an economic slowdown in the IT world as every major vendor is seeing delays in closing business,” Hyoun Park, CEO and chief analyst of research firm Amalgam Insights, told Channel Futures earlier this month. “Oracle has always been a disciplined company in terms of managing to the numbers, so it is no surprise to see Oracle lay off staff, even in a growth area.”
Parent company Oracle previously cut jobs in October and August.
Salesforce is up next. The week of Nov. 7, the company let go of fewer than 1,000 people.
Here’s the statement Salesforce provided to several media outlets: “Our sales performance process drives accountability. Unfortunately, that can lead to some leaving the business, and we support them through their transition.”
This wasn’t the first round Salesforce has undergone in recent months. The company axed jobs in October, too, and started its own hiring freeze, set to last through January.
Last week, SADA, the Google Cloud-only managed service provider, enacted layoffs for the first time in its 22-year history. The cuts affected 11% of its workforce, throughout North America, CEO Tony Safoian said on LinkedIn.
“This is something we’ve never done, and it is the most difficult decision we have made as a company,” Safoian wrote.
The move came after SADA held its first-ever customer event in September, and has spent much of 2022 touting its growth. While Safoian did not specify why SADA is laying off employees, the MSP no doubt suffered some trickle-down effects as Alphabet, which owns Google Cloud, reported weaker-than-expected earnings. SADA’s customers also are combating the same macroeconomic pressures as everyone else.
China isn’t immune from layoffs, either. Cloud computing provider Tencent reportedly is getting rid of workers in its platform and content, interactive entertainment, and cloud and smart industries group. That comes from Reuters, which could not establish the exact number of people affected. However, here’s what reporters noted about the layoffs: “China’s technology sector continues to feel the effects of a regulatory crackdown and headwinds from zero-COVID measures that have slowed the broader economy. Tencent already cut jobs earlier this year, alongside peers, including Alibaba Group and smaller Chinese tech companies such as Xiaohongshu.”
Layoffs are coming throughout the tech sector, not just in cloud. Meta, Facebook’s parent company, just shed 11,000 jobs, about 13% of its workforce. Microsoft cut nearly 1,000 employees last month. And, of course, Twitter has been enduring a bloodbath of job losses since Elon Musk took over.
All of the activity does bear echoes to the dotcom bust of the early 2000s. The question remains whether the cloud sector will be able to avoid a similar level of destruction.
Layoffs are coming throughout the tech sector, not just in cloud. Meta, Facebook’s parent company, just shed 11,000 jobs, about 13% of its workforce. Microsoft cut nearly 1,000 employees last month. And, of course, Twitter has been enduring a bloodbath of job losses since Elon Musk took over.
All of the activity does bear echoes to the dotcom bust of the early 2000s. The question remains whether the cloud sector will be able to avoid a similar level of destruction.
Could cloud layoffs be about to happen en masse? After several disappointing earnings reports coming from cloud computing providers, and in the wider tech space, job losses have begun. So far, Oracle Cloud, Salesforce, SADA and Tencent all have enacted cloud layoffs. Facebook parent Meta last week shed thousands of jobs, while Amazon reportedly is about to cut 10,000 employees (go to the slideshow above to find out whether Amazon Web Services is impacted).
Keep up with our telecom-IT layoff tracker to see which companies are cutting jobs and the ensuing channel impact. |
According to Layoffs.fyi, 789 tech companies have laid off 121,413 employees so far this year. The cuts are coming in the wake of COVID-era overhiring. Even as the pandemic started to wane last year, and even as supply chain problems, high energy costs and inflation pointed to a recession, companies kept adding people. Now their staff — seemingly not the executives who failed to plan — are paying the piper.
More cloud layoffs could be in the offing as organizations pull back on, and optimize, cloud spending. Once considered untouchable, cloud is proving just as vulnerable to recessionary fears as any other technology. Click through the slideshow above for more insight.
Want to contact the author directly about this story? Have ideas for a follow-up article? Email Kelly Teal or connect with her on LinkedIn. |
Read more about:
MSPsAbout the Author(s)
You May Also Like