Amazon CEO Andy Jassey announced that the company will eliminate about 14,000 manager positions to increase the ratio of individual contributors to managers by at least 15% by the end of Q1 2025. A company executive has now clarified that Jassy’s plan will affect far fewer managers than some have expected.
According to a report by The Information, the layoffs will apply only to its corporate employees.The company is reportedly cutting jobs partly to combat the bureaucracy creeping into its culture.
Citing Udit Madan, head of Amazon’s worldwide operations, the report said that “Amazon’s efforts to cut back the number of managers at the company will apply only to its corporate employees, not to what it calls ‘front line’ staff-the workers in its sprawling warehouse and delivery operations who represent the vast majority of its head count:.
The report notes that out of the more than 1.5 million total global employees at Amazon, over 1 million are front-line workers. Nearly 350,000 have corporate roles, including those in engineering, marketing and product management.
Job cuts at Amazon
Layoff at Amazon potentially saves up to $3 billion per year, according to a recent Morgan Stanley analysis. These changes are said to be a part of Amazon’s broader effort to “operate like the world’s largest startup,” with the company CEO emphasising the need for “strong urgency, high ownership, fast decision-making, scrappiness and frugality, deeply-connected collaboration.”
Amazon reportedly acknowledged that it has “added a lot of managers” recently and believes “now is the right time” to make this change. Every team has been told to review their structure, and it’s “possible” that some roles may be eliminated.
Reportedly, Amazon is restructuring its organisation to eliminate unnecessary layers of management. This streamlining aims to reduce bureaucratic hurdles and empower employees to make faster decisions.
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