Amazon is set to cut 14,000 managerial positions by early 2025 as part of a plan to save between $2.1 billion and $3.6 billion a year. This will reduce its global management workforce by 13%, bringing the number of managers down from 105,770 to 91,936.
Why Is Amazon Making These Cuts?
The company is looking to simplify decision-making and improve efficiency. CEO Andy Jassy wants to increase the number of individual employees compared to managers by at least 15% by early 2025. The goal is to reduce bureaucracy and speed up operations.
According to an analysis by Morgan Stanley, nearly 13,834 managerial jobs will be affected under this initiative. This follows previous layoffs in Amazon’s communications and sustainability teams.
Other Cost-Cutting Strategies
Along with job cuts, Amazon has introduced several ways to save money, including:
- A “bureaucracy tipline” for employees to report inefficiencies.
- Limits on senior-level hiring.
- Pay structure reviews and increasing the number of direct reports per manager.
The company has also scaled back programs like its “Try Before You Buy” clothing service and rapid brick-and-mortar delivery to focus on profitability.
Adapting to Market Changes
Amazon’s workforce grew rapidly during the pandemic, doubling from 798,000 employees in 2019 to over 1.6 million by the end of 2021. However, as business needs shifted, the company reassessed its staffing strategy. In 2022 and 2023, Amazon already laid off 27,000 employees, and this latest move is another step in adjusting to changing market conditions.
With these changes, Amazon aims to create a leaner and more efficient organization.