Microsoft and Google are reportedly laying off hundreds of employees at their respective cloud business units, continuing what has been dramatic workforce downsizing at the world’s largest hyperscalers despite booming business.

Business Insider reported earlier this week that Microsoft is cutting up to 1,500 jobs at its telecom-focused Azure for Operators business and hundreds more from its Mission Engineering operations.

Microsoft’s Azure for Operators business is the hyperscaler’s overarching 5G-focused cloud platform that has been bolstered by several recent acquisitions. The most significant was Microsoft’s acquisition of AT&T’s Network Cloud technology in mid-2021, which has since underpinned AT&T’s 5G telecom plans.

Business Insider also reported that Google was cutting jobs at its cloud unit, a report echoed by CNBC. The CNBC report indicated those cuts would come from “sales, consulting, ‘go-to-market’ strategy, operations and engineering.”

Cloud, tech job cuts remain rampant

The latest round of job cuts continues what has been a growing trend among what are seemingly growing technology firms.

Tech giants like Google, Microsoft, Meta, and Amazon cut more than 260,000 jobs in 2023, which was a significant increase from 2022. Those large firms this year have already cut more than 40,000 jobs, with data from Stocklytics and Layoffs.fyi showing that 40% of tech job cuts in 2024 happened at just four companies: SAP, Cisco, PayPal, and Farfetch.

According to Layoffs.fyi data, SAP leads 2024 job cuts with 8,000 layoffs as part of a restructuring process. Cisco laid off 4,250 employees, though it noted those cuts came on the back of lower guidance.

The job cuts at hyperscalers have come despite robust business.

Synergy Research Group (SRG) recently reported that overall cloud spending increased 21% during the first quarter of this year compared to the same quarter in 2023, hitting a total spend of $76 billion. IDC this week predicted worldwide spending on public cloud services “is projected to reach a staggering $219.3 billion by 2027.”

Gartner is even more enthusiastic about the space, predicting worldwide end-user spending on public cloud services will grow 20.4% to total $675.4 billion in 2024, up from $561 billion in 2023. The analyst firm pinned some of that surge on the increasing use of generative artificial intelligence (genAI) services.

“The continued growth we expect to see in public cloud spending can be largely attributed to genAI due to the continued creation of general-purpose foundation models and the ramp up to delivering genAI-enabled applications at scale,” Sid Nag, VP and analyst at Gartner, wrote. “Because of this continued growth, we expect public cloud end-user spending to eclipse the $1 trillion mark before the end of this decade.”