Amazon Announces Cutting 14,000 Managerial Positions by 2025

Amazon has announced a restructuring plan that will eliminate approximately 14,000 managerial positions by the beginning of 2025. The measure aims to save between US$ 2.1 billion and US$ 3.6 billion annually, representing a reduction of 13% in the company's global managerial workforce, which will go 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 optimize its operations and restructure teams.

According to Business Insider, the job cuts are part of CEO Andy Jassy's strategy to simplify decision-making and speed up 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 management layers will make operations more efficient and allow Amazon to make faster decisions by avoiding excessive bureaucracy.

In a note released on Thursday, Morgan Stanley projected that Amazon's plan could eliminate around 13,834 managerial positions by the beginning of next year. The estimate is based on the assumption that managers represent 7% of the company's total workforce.

"Morgan Stanley estimated that this effort could lead to the elimination of approximately 13,834 management positions by early next year, resulting in cost savings of US$ 2.1 billion to US$ 3.6 billion," Business Insider reported.

As part of this plan, Amazon 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 more than 27,000 jobs in 2022 and 2023. The company also retreated from projects that didn't generate profits, including its "Try Before You Buy" initiative for clothing and a fast delivery service to physical stores.

Amazon's workforce has grown significantly during the pandemic, reaching over 1.6 million by the end of 2021, a significant increase from the 798,000 employees at the end of 2019. Although the numbers have decreased since then, the company is still recalibrating its staffing needs.

Earlier this year, Amazon ordered corporate employees to return to the office five days a week. Some were asked to relocate to designated office centers, which led to some professionals choosing to leave the company rather than move.

With information from Techstartups.com