Amazon announced a restructuring plan that will eliminate approximately 14,000 managerial positions by early 2025. The measure aims to save between US$ 2,1 billion and US$ 3,6 billion annually, representing a 13% reduction in the company's global management workforce, what will happen from 105.770 for 91.936 managers
This decision comes after recent layoffs in Amazon's communication and sustainability departments, while 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 the decision-making process 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 management layers will make operations more efficient and allow Amazon to make faster decisions, avoiding excessive bureaucracy
In a note released on Thursday, Morgan Stanley projected that Amazon's plan could eliminate about 13.834 managerial positions by the beginning of next year. The estimate is based on the premise that managers represent 7% of the total workforce of the company
Morgan Stanley estimated that this effort could lead to the elimination of approximately 13.834 management positions by the beginning of next year, resulting in cost savings of US$ 2,1 billion to US$ 3,6 billion, reported Business Insider
As part of this plan, Amazon launched a "bureaucracy whistleblower channel", encouraging employees to point out inefficient procedures that slow down work. Managers were also instructed to increase the number of direct reports, limit hiring of high-level positions and review salary structures to support the transition to a leaner management model
This wave of layoffs continues Amazon's cost-cutting efforts, that had already cut more than 27 thousand jobs in 2022 and 2023. The company also backed away from projects that were not generating profits, including your "Try Before You Buy" initiative for clothing and a fast delivery service in physical stores
Amazon's workforce grew significantly during the pandemic, reaching over 1,6 million at the end of 2021, a significant increase compared to the 798 thousand employees at the end of 2019. Although the numbers have decreased since then, the company is still recalibrating its staffing needs
At the beginning of this year, Amazon has determined that corporate employees return to the office five days a week. Some were asked to relocate to designated office centers, what led some professionals to choose to leave the company instead of relocating
With information from Techstartups.with
