Amazon’s cloud business is clamping down on managers’ freedom to hire in latest cost control—leaked memo

Amazon CEO Andy Jassy
Led by CEO Andy Jassy, Amazon is cracking down on headcount, and its cloud division is feeling the heat.
F. Carter Smith—Bloomberg/Getty Images

Amazon’s cloud business is introducing new restrictions that limit managers’ ability to hire, the latest move by the internet company to keep its costs in check as sales growth slows to the lowest level in years.

In a memo sent to Amazon Web Services (AWS) hiring managers on Tuesday, the company said that all potential hires must now be filtered through a special headcount management system to ensure that they are matched with a specific open position. The in-house tool, called Roster, will act as “the source of truth for approved headcount plans,” according to the memo, which was viewed by Fortune.

AWS managers must begin using Roster immediately, the memo said. By the end of the month, the memo continued, new features will be enabled in a separate internal recruiting tool “to prevent offers from being extended if a requisition is not matched to a position in Roster.”

The changes come as AWS and parent company Amazon move aggressively to cut costs. After sweeping layoffs at the online retailer that affected 18,000 corporate positions over the last several months, Amazon announced another 9,000 job cuts in March, which impacted its prized cloud division. Now, six months after a hiring freeze was instituted and experiencing a decline in sales growth that caused the stock to dip 2% last week, the company is working on controls that create a more disciplined hiring system.

“Like most companies, Amazon makes regular process improvements over time to meet the needs of their customers,” Amazon spokesperson Jennifer Flagg wrote to Fortune. “Roster is a position based management tool that improves the hiring process across the organization for both candidates and hiring managers.”

Roster is being deployed by AWS’s Workforce Management, the memo said, and is part of a plan to ensure that “all hiring efforts and resourcing aligns to approved business demands by EOY 2023.” The memo explains numerous variables that will be considered against hiring managers’ “approved headcount plans,” which are listed as follows: Builders in Seat (BIS), Pending Starts (PS), and open Requisitions (Reqs).

In Amazon’s Q1 earnings call last week, CEO Andy Jassy hyped up the possible impact A.I. would have on the cloud division. At the dismay of shareholders, executives added that AWS so far in April is on track to grow 11%, a significant decline from the approximately 16% growth seen in the first quarter, which itself was a marked slowdown from the 37% growth that AWS achieved at the same time last year.

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