Less than a month after Amazon froze hiring amid worsening economic conditions, execs are preparing to accept job applications within its public cloud business again to expand its datacenter footprint.
In an interview with Bloomberg, Mark Garman, SVP of sales and marketing for AWS, said he expected to begin adding staff starting next year, and denied any plans to reduce spending on new datacenters and infrastructure. He said the cloud biz would moderate its datacenter expansion in line with demand. “We have a lot of supply chain models that tell us to keep building datacenters, so we’re gonna keep building them.”
The news comes after Beth Galetti, Amazon’s SVP of people and technology, announced the freeze earlier this month, citing an “unusual macroeconomic environment.” It is also reportedly considering laying off 10,000 employees, or under 1 percent of its global workforce.
The macroeconomic forces in question appear to be in reference to slowing revenues across the company’s e-commerce and cloud businesses. This was a central point of discussion during the company’s Q3 earnings call. Amazon is still making money, just not as quickly as it, or investors, would like.
Looking to the holiday quarter, executives forecast revenue growth of just 2-8 percent year over year, with slowdowns for its cloud business. Higher energy costs and declining customer demand were also cited as key drivers for the slowdown.
Despite these concerns, the company has yet to tighten its pocket book with regard to additional datacenters. Last week, Amazon announced it would spend $4.4 billion in India to add a second region. And as of this month, the company has more than 15 availability zones in development across Australia, Canada, Israel, New Zealand, and Thailand. The company also has five datacenters, valued at $12 billion, under construction in Oregon. The first is expected to come online starting late next year.
AWS isn’t the only cloud provider continuing to expand its datacenter footprint in spite of worsening economic conditions. Microsoft this week said it would spend $1 billion on datacenters in North Carolina, as part of a plan to build 50-100 new bitbarns annually over the next several years. Google, meanwhile, has continued to expand to new regions in the Americas, Europe, the Middle East, and the Asia Pacific, including a $1.2 billion plan to grow its presence in Latin America.
The cloud providers’ continued investments in datacenter infrastructure is hardly surprising. Hyperscale and cloud customers have a tendency to increase capex spending, especially during periods of economic turmoil, Dell’Oro analyst Baron Fung told The Register in an interview this month.
With next-gen CPUs and GPUs starting to hit the market this fall, there are also competitive reasons why cloud providers, like AWS, might not want to pull back on their datacenter investments now. Nearly every major cloud provider has announced plans to offer VMs based on Intel’s long-delayed Sapphire Rapids 4th-gen Xeon Scalable and AMD’s newly launched 96-core Epyc 4 CPUs. ®