To streamline operations and enhance efficiency, Amazon is set to lay off 14,000 managerial employees by early 2025.
This decision, part of the company’s broader cost-cutting strategy, aims to save between $2.1 billion and $3.6 billion annually.
The layoffs represent a 13% reduction in Amazon’s global management workforce, reducing the number of managers from 105,770 to 91,936.
Restructuring for Efficiency
The layoffs are part of Amazon CEO Andy Jassy’s vision to simplify decision-making and reduce bureaucracy.
Andy has outlined plans to increase the ratio of individual contributors to managers by at least 15% by the first quarter of 2025.
This restructuring is expected to accelerate workflows and improve operational efficiency.
To support these changes, Amazon has introduced a “bureaucracy tipline”, allowing employees to report inefficiencies.
Managers have also been directed to increase the number of direct reports under them, limit senior hiring, and review pay structures.
These measures align with Amazon’s goal of creating a leaner and more agile organization.
Impact on Amazon on Workforce and Cost Savings
The managerial layoffs follow previous job cuts in Amazon’s communications and sustainability units.
During the pandemic, Amazon’s workforce expanded rapidly, growing from 798,000 employees in 2019 to over 1.6 million by the end of 2021.
As market conditions changed, the company reassessed its staffing needs. This led to the elimination of 27,000 positions in 2022 and 2023.
The current round of layoffs will significantly reduce salary and operational costs.
Managerial roles at Amazon typically command salaries ranging from $200,000 to $350,000 annually.
This reduction will make a significant contribution to the company’s cost-saving efforts.
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