Amazon plans to cut approximately 14,000 managers by early 2025, aiming to save between $2.1 billion and $3.6 billion a year. This reduction reduces the number of managers from 105,770 to 91,936, down 13% in Amazon’s global management workforce.
The move follows recent layoffs for Amazon’s Communications and Sustainability Unit, which drives the company to streamline operations and rebuild its teams.
According to Business Insider Job Cut is part of it CEO Andy Jassy’s strategy to simplify decision-making and speed up the process. Last month, Jassy announced plans to increase the individual contributor ratio by at least 15% by the end of the first quarter of 2025. He emphasized that reducing the management level could streamline the operation of the station.
In a memo released Thursday, Morgan Stanley predicted that Amazon’s plans will cut around 13,834 managers by the start of next year, saving the company between $2.1 billion and $3.6 billion. The estimate is based on the assumption that managers make up 7% of Amazon’s workforce.
“Morgan Stanley estimated that this effort could eliminate approximately 13,834 manager roles by the beginning of next year, cost savings of between $2.1 billion and $3.6 billion,” Business Insider reported.
As part of the plan, Amazon launched a “Bureaucratic Tiplin” to encourage employees to flag inefficient procedures that slow down work. Managers are also instructed to increase direct reports, limit senior recruitment, review wage structures, and support a shift towards a more lean management model.
This wave of layoffs continues Amazon’s cost-cutting efforts, which saw more than 27,000 job cuts in 2022 and 2023. The company has taken back to projects that didn’t make any profit, such as “buy before trying” clothing initiatives and quick brick-and-mortar distribution services.
Amazon’s workforce has grown significantly during the pandemic, surpassing 1.6 million by the end of 2021, up from 798,000 in the second half of 2019.
Earlier this year, Amazon required corporate employees to return to the office five days a week. Some staff were asked to move to designated office hubs and urged them to leave rather than move.
Management restructuring is another important part of Jassy’s approach, which involves efforts to reduce the layer between employees and leadership.
The move will set Amazon a workforce alongside other tech companies. LayOffs.fyi reports that 81 high-tech companies have eliminated 22,692 jobs so far this year, a tech site tracking job cut.
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