Amazon is set to cut 14,000 managerial positions by early 2025 as part of its ongoing cost-reduction strategy, according to reports. This move, which accounts for a 13% reduction in its global management workforce, is expected to help the company save between Rs 210 crore and Rs 360 crore annually. Following the layoffs, Amazon’s total managerial headcount will drop from 1,05,770 to 91,936, according to the report.
Part of broader restructuring strategy
The job cuts come as Amazon continues to restructure its workforce, having previously trimmed roles in its communications and sustainability divisions. CEO Andy Jassy has been leading a strategic overhaul to eliminate bureaucratic layers and enhance operational efficiency.
In line with these changes, the company has launched a “bureaucracy tipline”, allowing employees to report inefficiencies. Additionally, Amazon has revised its managerial directives, focusing on:
- Expanding the number of direct reports per manager
- Limiting senior-level recruitment
- Reviewing compensation structures
These steps are aimed at improving productivity and profitability while ensuring a leaner management structure.
Focus on core business operations
Amazon has also discontinued certain initiatives, including the ‘Try Before You Buy’ clothing programme and a rapid brick-and-mortar delivery service, as it shifts focus to its core business areas.
CEO Andy Jassy’s strategy includes raising the ratio of individual contributors to managers by at least 15% by 2025. His approach is designed to streamline decision-making and remove unnecessary management layers, facilitating faster operations.
Changes in workplace policies
The restructuring follows Amazon’s decision to enforce an in-office work policy, requiring employees to return five days a week starting January 2025. Jassy previously stated that office-based work would enhance collaboration and efficiency.
According to an October 2024 report by Morgan Stanley, Amazon’s restructuring is expected to eliminate around 13,834 managerial roles by early 2025.
Workforce expansion and previous layoffs
During the COVID-19 pandemic, Amazon saw a surge in its workforce, growing from 7.98 lakh employees in 2019 to over 16 lakh by the end of 2021. However, the company later scaled back, cutting 27,000 jobs in 2022 and 2023.
With these latest layoffs, Amazon continues its transition towards a more cost-effective and streamlined workforce, prioritizing efficiency over managerial expansion.