Amazon may cut 14,000 managerial roles
By MYBRANDBOOK
Amazon may cut approximately 14,000 managerial roles by early 2025, potentially saving the company over $3 billion annually, according to a report from Morgan Stanley.
This move aligns with CEO Andy Jassy's strategy to enhance operational efficiency by increasing the ratio of individual contributors to managers by at least 15%. The cost-cutting effort is part of Jassy’s larger push to streamline Amazon's workforce, optimize management layers, and ensure more focus on direct contributions rather than supervisory roles.
According to Morgan Stanley's note, managerial roles make up 7% of Amazon’s total workforce. As of the end of the second quarter of 2024, Amazon employed around 1,05,770 managers globally. By the first quarter of 2025, this number is expected to decrease to 91,936, as part of Amazon’s restructuring initiative to streamline operations and reduce bureaucracy within the company. This reduction aims to improve the individual contributor to manager ratio and cut down unnecessary managerial layers.
Amazon CEO has introduced a "bureaucracy tipline" where employees can report unnecessary processes that slow down work, according to a report. This initiative is part of a broader restructuring plan that aims to eliminate nearly 13,834 managerial roles by early 2025, which could result in savings between $2.1 billion and $3.6 billion, as noted by Morgan Stanley.
The restructuring aligns with Jassy’s goal of increasing the number of individual contributors while reducing layers of management, enhancing Amazon's overall operational efficiency.
Reducing managerial positions could help Amazon become leaner, particularly as it faces growing challenges in its e-commerce and cloud businesses, where efficiency is key to maintaining profitability. Such changes may also reflect the broader trend of tech companies reassessing workforce structures in response to economic pressures and evolving business needs.
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