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Amazon announces a hiring freeze in ‘parts’ of its cloud business

on Oct 25, 2022
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  • Amazon.com Inc is no longer hiring for parts of its cloud business.
  • Solus' Dan Greenhaus reacts to the news on CNBC's "Closing Bell".
  • Amazon stock is currently down nearly 30% versus the start of 2022.

Amazon.com Inc (NASDAQ: AMZN) is trading down in extended trading after the multinational said it was no longer hiring for “parts” of its cloud business.

Hiring freeze to only affect ‘parts’ of AWS

That follows a hiring freeze in retail and logistics in the first week of October.

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Remember that “parts” is the keyword in today’s announcement. In a statement to the “New York Post”, Amazon had its spokesperson clearly state that the hiring freeze affected only “parts” of its cloud business while the rest of it still had thousands of job openings.

The stock market news arrives only days before Amazon is scheduled to report its Q3 results. Consensus is for it to earn 24 cents a share this quarter – about a 22.5% decline on a year-over-year basis.

For the year, shares of Amazon.com Inc are currently down nearly 30%.

Dan Greenhaus reacts to the news on CNBC

Nonetheless, details are yet to pour in; and until they do, it’s somewhat premature to think of this report as intrinsically negative for the stock, said Dan Greenhaus (Solus Alternative Asset Management) on CNBC’s “Closing Bell: Overtime”.

They [might be] freezing hiring because they’ve reached the perfect amount of employment. So, productivity will be fine, revenue won’t be impaired, and margins will expand. We don’t know that there’s inherently negative connotations.

If anything, he added, it actually makes sense for the juggernaut to prioritise profitability over growth in the current macroeconomic environment.

Earlier this month, Amazon founder Jeff Bezos warned that economically more challenging times were ahead. (source)