In his most recent letter to shareholders, Amazon CEO Andy Jassy outlined the challenges Amazon Web Services (AWS) faces amid the economic downturn.
The
company is facing "short-term headwinds" in its cloud computing
business due to companies "being more cautious in spending given the
challenging, current macroeconomic conditions."
- According to the letter, AWS grew 29% YoY in 2022 on a $62B revenue base, however, AWS's revenue for Q4 2022 was $21.4B, falling short of the $21.87B figure predicted by Wall Street analysts.
- Jassy
stated, "We like a lot of the fundamentals that we're seeing in AWS,"
citing the company's new customer pipeline and active migrations.
- AWS
is following a strategy that involves building long-lasting customer
relationships to ensure the company remains lucrative well into the
future. Jassy emphasized that this has led AWS sales and support teams
to dedicate much of their time to helping customers optimize their AWS
spend to remain afloat in this uncertain economy.
- Last month, Amazon announced plans to lay off 9,000 employees worldwide and recently confirmed that this layoff round would impact a "small, single-digit percentage of AWS employees."
