AWS and Microsoft cut cloud outlook and hiring

Global slowdown reaches the cloud

Cloud giants AWS and Microsoft both appear to be preparing for the coming global recession, slashing spending and hiring in line with similar moves by customers.

Proving that even a ubiquitous business sector like cloud isn't immune to market weakness, Microsoft warned in an analyst call this week that Azure revenue growth would slow by five percentage points in Q4.

The note of caution affected analyst hopes that continued cloud demand would help Microsoft stave off pressures affecting the wider IT market. Shares fell 7% as a result.

As well as lower customer spending on cloud in general as they seek to save money, Microsoft said its own costs had risen in line with the rise in global energy prices. The company expects to spend an additional $800 million on data centre operations this year.

Microsoft also lost out in software sales to PC makers (down 15%) and the slowing global demand for PCs - with shipments down 19.5% in Q3, according to Gartner.

The company announced hundreds of job cuts earlier this month.

At Amazon, the company's existing hiring freeze has reached its AWS division, according to some prospective candidates.

Although Amazon announced a freeze on hiring in some areas earlier this month, its cloud business was not affected. Analysts generally interpreted this as a signal of AWS' importance in the company, where it is responsible for an increasingly large share of overall revenues.

However, a spokesperson has confirmed that even AWS has stopped hiring new employees in some sectors.

"In some areas of AWS we have met our hiring needs, and in others we have thousands of job openings," they said.

"Across Amazon, our many different businesses are at various stages of evolution, and we expect to keep adjusting our hiring strategies in each of these businesses at various junctures."

Other tech giants including Meta, Google, Apple, Oracle, Salesforce and Twitter have all announced hiring freezes this year, blaming the uncertain global economic situation.