A Recession is Looming: Are Layoffs Your Only Option?
We’re in the midst of an economic downturn that’s only deepening, and predictably, a slew of layoffs is the first response we’re seeing from big tech.
Financial experts have been warning about a looming recession for quite some time. Low interest rates, inflation, over two years of pandemic, war in Ukraine, and prior over-valuation of many tech companies has left the markets in a state of uncertainty. Former stars such as Peloton, Netflix, Zoom, and others have witnessed their stocks plummeting.
As a CEO myself, I understand the efforts that are put into hiring, training, and growing employees –– employees who were hired to achieve a common goal and are an essential part of the company and culture. But reality has changed and for some, this means it’s time to put the dream on hold and adjust to a new reality.
At the same time, letting go of good and talented staff hurts. CEOs will want to know they’ve exhausted all possible options before standing in front of their people and using the dreaded L-word. CEOs will want to first look at their non-human assets and cut down on areas where money is being wasted.
One area to examine, of course, is the cloud.
The Cloud Costs Businesses Billions
Gartner estimated that this year, global spending on cloud computing will reach around $494.7 billion. And according to Zesty’s 2022 CIO and CTO Survey Report, cloud spend is expected to compose 47% of the overall technology budget.
With the cloud being so critical to business agility, digital transformation, and business growth, it is no wonder why companies are spending so much on cloud services. But is all this spend essential? Or are cloud costs actually bloated?
In Flexera’s State of the Cloud Report, organizations estimate that 32% of cloud spend is wasted, meaning they are spending on resources that are not actually being used, and do nothing to promote the business’s growth.
If we are spending $494.7 billion on the cloud and 32% of that spend is waste, that amounts to approximately $158.3 billion wasted annually on cloud services.
How many jobs could be saved with that amount of cash? Better yet, how many new jobs could be generated if we did away with cloud waste?
Your Employees Are Not Expendable. Cloud Waste Is
If we took the time to evaluate our cloud spend, assess what’s being wasted, and implement real changes to ensure cloud financial efficiency, we’d be in a better position to keep the employees we have. Some companies might even be able to hire more and thus maintain growth.
In fact, our customer, Dan Robinson, former CTO of Heap, confirmed that he could hire four or five additional engineers with the $1 million he saved from using Zesty’s cloud cost optimization technology.
Businesses can start by implementing FinOps as well as a CCOE to ensure they are assigning responsibility for cloud spend and putting together strategic processes that bring about greater cloud financial efficiency.
Yet implementing cloud management processes that are managed by people is time-consuming and inefficient.
On the other hand, harnessing automation will take the effort out of managing cloud costs by automatically adjusting resources to fit current usage. This helps reduce cloud costs while freeing employees to engage in higher-value activities.
The Bottom Line
In times of economic uncertainty, companies rightly focus their energy on preserving their existing gains. The priority shifts from the top line to the bottom line. Conservation of resources is king.
Despite this, we also have an obligation to think creatively and strategically to devise the most beneficial ways to move forward without hurting innovation and growth.
An investment in cloud cost management is an investment in talent and organizational growth. There’s no better time to start investing than right now.
Cloud financial management does not have to be a challenge. Chat with one of our cloud experts to learn how Zesty can automate cloud savings.