AWS invests $35 billion in data centers amid Amazon layoffs

News from the data center

Markus Haranas

Amazon Web Services announces plans to invest $35 billion to build new data centers across Virginia.

Though parent company Amazon is laying off 18,000 employees, it’s clear that Amazon Web Services is a top priority as the company announces plans to invest $35 billion in building data centers across Virginia to expand its cloud computing capabilities and expand its customer base.

Based in Seattle, Washington, AWS has invested more than $35 billion in Virginia alone since 2006, and AWS plans to invest an additional $35 billion through 2040 to expand its cloud computing capabilities in Virginia — known as the the data center capital of the world.

“Virginia is a global leader in innovation and cloud computing, thanks to its investment in a resilient, highly skilled workforce and emphasis on long-term public and private partnerships,” said Roger Wehner, director of economic development at AWS, in a statement. “We plan to invest an additional $35 billion in the Commonwealth of Virginia by 2040 and create 1,000 jobs.”

[Related: 40,000 Tech Layoffs: Amazon Vs. Google Vs. Microsoft]

AWS, which is on track to hit $100 billion in revenue this year, has worked with state officials to secure the project that will expand AWS’s data center investments over the next 17 years to new locations across the country Virginia will expand.

New Mega Data Center Incentive Scheme; $140 million AWS grant

Virginia is so optimistic about cloud expansion of AWS data centers in the state that the state is developing a Mega Data Center Incentive Program that AWS will be eligible for.

The state’s new Mega Data Center Incentive Program includes up to a 15-year extension of data center sales and tax exemptions for qualifying equipment and activation software.

In addition, AWS is eligible for an individual performance grant of up to $140 million for site and infrastructure improvements, staff development, and other project-related costs.

The data center incentive program is awaiting approval by the Virginia General Assembly.

AWS expands data center abroad

Amazon, along with other cloud hyperscalers like Microsoft and Google, is one of the biggest financiers of building and equipping new data centers on a global scale.

The goal for the world’s largest cloud computing companies is to build data centers to power their local zones or local cloud regions, enabling them to provide cloud services to thousands of customers in a given geographic region to provide. Having cloud regions on-premises helps reduce latency and data processing.

In January, AWS introduced two new AWS Local Zones in Australia and Chile.

The two new cloud zones are in the metropolitan areas of Perth, Australia; and Santiago, Chile.

AWS Local Zones places AWS compute, storage, database, and other services in popular locations to enable customers to deploy applications that require single-digit millisecond latency to end users or on-premises data centers.

AWS plans to roll out 23 more Local Zones in metro areas around the world.

Data center investments come amid Amazon’s layoffs

The announcement of a $35 billion investment in Virginia and the launch of two new local zones overseas comes the same month that parent Amazon announced it would lay off 18,000 employees.

Amazon has around 1.5 million employees around the world, which means the 18,000 layoffs will affect just over 1 percent of Amazon’s entire workforce.

Regarding the layoffs at Amazon impacting AWS, sources told CRN that AWS would not see any significant layoffs.

The majority of role eliminations occur in the Amazon Stores and PXT (People, Experience and Technology) organizations. PXT is the human resources department of Amazon.

    Learn more about Mark Haranas

Markus Haranas

Mark Haranas is an Associate News Editor and veteran journalist now covering cloud, multicloud, software, SaaS and channel partners at CRN. He speaks to world-renowned CEOs and IT professionals, covers breaking news and live events, and chairs several CRN reporters. He can be reached at [email protected].

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