Amazon’s advertising business, which remains one of the more profitable divisions of the company, will no longer witness the creation and filling of new positions within the unit. In what is the latest instance of companies dealing with the current, and bracing for an even doomier economic downturn, Amazon informed that it was freezing hiring across staffing levels in the advertising business.
The company disclosed the news internally on November 1, adding that while the current vacancies would be filled by bringing in new blood, no new positions will be created as Amazon is working to reduce its expenses amidst a slower growth in sales and is focussing on profitability, at a time when adverse economic conditions have wreaked havoc on the tech sector and led to mass layoffs, falling stocks, slowing or freezing of hiring, and a drying up of funds from investors.
“Amazon continues to have a significant number of open roles available across the company,” a spokesperson said in a statement. “We have many different businesses at various stages of evolution, and we expect to keep adjusting our hiring strategies in each of these businesses at various junctures.”
“We’re going to continue to make sure that we have strong funding for businesses like AWS and advertising, where we’re still early growth, and we need to support our customers and grow the business,” Brian Olsavsky, Amazon CFO, had informed in a conference call after Amazon reported its earnings for the quarter ended September 30, 2022.
The quarter saw AWS (Amazon Web Services) report its slowest-ever growth in revenue, while the net sales increased by 15% year-over-year (YoY) to clock $127.1 billion in the third quarter of the year.
Olsavsky attributed the slow growth in revenue of AWS to a lesser amount of enterprise spending, and according to an Amazon employee, the sales and marketing unit of AWS will freeze hiring until the end of the first quarter of 2023, until which the critical roles will be filled and open positions will be closed.
Amazon’s advertising business, for its part, performed strongly in the third quarter of the year. It generated $9.54 billion in revenue in the third quarter – an annual growth of 25% – fuelled by search results on its web store and remains one of the fasters-growing areas of the e-commerce behemoth. As it moved beyond search ads and leveraged its cloud and e-commerce businesses to boost ad sales, the ad business pocketed a total of $31 billion in revenue over 2021 and became the third-largest digital advertising platform by revenue in the US.