New York: Amazon is set to cut 14,000 managerial positions by early 2025 as part of an aggressive cost-saving strategy aimed at reducing annual expenses by $2.1 billion to $3.6 billion. The reduction, which constitutes a 13% cut in Amazon’s global management workforce, will bring the number of managers down from 105,770 to 91,936.
Streamlining Operations
The layoffs come in the wake of job cuts in Amazon’s communications and sustainability divisions, underscoring the company’s ongoing efforts to restructure teams and improve operational efficiency.
According to Business Insider, the decision aligns with CEO Andy Jassy’s broader vision to simplify decision-making and enhance agility. Jassy has outlined a plan to increase the ratio of individual contributors to managers by at least 15% by the first quarter of 2025, aiming to reduce bureaucracy and accelerate decision-making processes.
A report from Morgan Stanley estimates that Amazon’s restructuring efforts will lead to the elimination of approximately 13,834 managerial roles by early next year, resulting in significant cost savings.
Efficiency-Driven Measures
As part of its broader efficiency push, Amazon has introduced several initiatives designed to cut costs and optimize management structures. Among these is a new “bureaucracy tipline,” which allows employees to report inefficiencies. Additionally, managers have been instructed to:
- Increase the number of direct reports.
- Limit senior-level hires.
- Reevaluate pay structures.
These measures are aligned with Amazon’s overarching strategy to streamline operations and enhance profitability. The company has already scaled back or shut down multiple initiatives, including its “Try Before You Buy” clothing program and a rapid brick-and-mortar delivery service.
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Workforce Adjustments
Amazon’s workforce grew significantly during the COVID-19 pandemic, soaring from 798,000 employees in 2019 to over 1.6 million by the end of 2021. However, the company has since recalibrated its staffing levels to align with evolving business needs. In 2022 and 2023, Amazon laid off 27,000 employees as part of broader restructuring efforts.
The latest round of managerial job cuts signals Amazon’s continued focus on optimizing its workforce to maintain financial stability and long-term growth.
