Amazon has announced a restructuring plan that will eliminate approximately 14,000 managerial positions by early 2025. The measure aims to save between $2.1 billion and $3.6 billion annually, representing a 13% reduction in the company’s global managerial workforce, which will decrease from 105,770 to 91,936 managers.
This decision comes after recent layoffs in Amazon’s communications and sustainability departments as the company seeks to streamline its operations and restructure teams.
According to Business Insider, the job cuts are part of CEO Andy Jassy’s strategy to simplify decision-making processes and accelerate internal procedures. Last month, Jassy announced plans to increase the ratio of individual contributors to managers by at least 15% by the end of the first quarter of 2025. He emphasized that reducing managerial layers will make operations more efficient and enable Amazon to make faster decisions while avoiding excessive bureaucracy.
In a note released on Thursday, Morgan Stanley projected that Amazon’s plan could eliminate about 13,834 managerial positions by early next year. The estimate is based on the premise that managers make up 7% of the company’s total workforce.
“Morgan Stanley estimated that this effort could lead to the elimination of approximately 13,834 managerial positions by early next year, resulting in cost savings of $2.1 billion to $3.6 billion,” reported Business Insider.
As part of this plan, Amazon has launched a “bureaucracy reporting channel,” encouraging employees to point out inefficient procedures that slow down work. Managers have also been instructed to increase the number of direct reports, limit senior hires, and review salary structures to support the transition to a leaner management model.
This wave of layoffs continues Amazon’s cost-cutting efforts, which had already cut over 27,000 jobs in 2022 and 2023. The company has also pulled back from projects that weren’t profitable, including its “Try Before You Buy” initiative for clothing and a quick delivery service at physical stores.
Amazon’s workforce grew significantly during the pandemic, reaching over 1.6 million by the end of 2021, a substantial increase from 798,000 employees at the end of 2019. While the numbers have since decreased, the company is still recalibrating its staffing needs.
Earlier this year, Amazon mandated corporate employees return to the office five days a week. Some were asked to relocate to designated office centers, leading some professionals to choose to leave the company instead of moving.
With information from Techstartups.com
