Amazon Cloud Unit Plans to Add Staff in 2023, Keep Building Data Centers (AMZN)

A hiring freeze elsewhere in the company hasn't derailed investment plans for its most profitable business, as evidenced by Amazon.com Inc.'s cloud unit plans to add employees next year.

Amazon implemented hiring curbs across corporate groups, pausing recruiting except in certain areas or with executive approval. About 10,000 jobs are going to be cut. Matt Garman, a senior vice president who oversees the sales and marketing teams at Amazon Web Services, expects his organization and the business to add staff in the years to come.

In an interview on the sidelines of the re:Invent conference in Las Vegas, Garman said he expects to add more employees next year. The business is growing fast.

Sales in Amazon's cloud unit, the largest provider of rented data storage and computing power, increased 27% in the third quarter. It is the slowest year-over-year growth since Amazon began breaking out the division's performance in 2014, as some businesses sought to slow their technology spending to weather an economic downturn.

Garman said that before the executive team made the decision to freeze hiring, they had been discussing their own curbs, conversations that were going on regardless of the souring economic outlook. Amazon used to shift from periods of investment to self-imposed frugality to ward off corporate bloat.

Garman said that they hadn't done it in a couple years. The time was right.

We have a pause and I believe our teams are embracing it. It's good to have a time of digestion when we've grown so fast.

In recent years, the teams Garman leads did a lot of the hiring, as the company bulked up on the sales staff necessary to win contracts. Garman said that they started from zero. We have done a good job there. I don't think we're as small as some of our competitors.

All of the parent company's operating income can be accounted for by the profit engine of Amazon Web Services. Some are questioning the pace of Amazon's investment in the cloud. On an earnings call in October, after Amazon projected the slowest-ever growth for a holiday quarter, a financial analyst asked if the company would curb its spending on new data centers.

Garman said in the interview that they will moderate the growth of the data center. We have a lot of supply chain models that tell us to build more data centers.