Amazon to Cut 14,000 Managerial Roles by 2025, Aiming for $3.6B in Savings
Amazon plans to eliminate 14,000 managerial positions by early 2025, aiming to save between $2.1 billion and $3.6 billion annually.
This reduction, amounting to 13% of its global management workforce, will reduce the number of managers from 105,770 to 91,936.
The decision follows recent layoffs in Amazon’s communications and sustainability units as part of a broader effort to streamline operations and restructure teams.
According to Business Insider, the job cuts are part of CEO Andy Jassy’s strategy to simplify decision-making and improve efficiency. Jassy aims to increase the ratio of individual contributors to managers by at least 15% by the first quarter of 2025.
A Morgan Stanley report estimates that this restructuring could result in the elimination of about 13,834 managerial roles, generating significant cost savings.
New Measures to Enhance Efficiency
As part of its strategy to cut costs, Amazon has introduced several measures aimed at reducing inefficiencies and increasing productivity.
A key initiative is the introduction of a “bureaucracy tipline” that allows employees to report inefficiencies within the organization.
Managers have been directed to:
- Increase the number of direct reports
- Limit senior-level recruitment
- Review compensation structures
These changes reflect Amazon’s broader efforts to streamline operations and focus on profitability. The company has already shut down certain initiatives, such as the “Try Before You Buy” clothing program and a rapid brick-and-mortar delivery service, to refocus on its core business areas.
Amazon’s workforce had expanded rapidly during the pandemic, growing from 798,000 employees in 2019 to over 1.6 million by the end of 2021.
However, the company has since recalibrated its staffing needs, cutting 27,000 jobs in 2022 and 2023.
Reaction to Layoffs
Amazon’s decision to lay off more employees has drawn criticism from industry figures. Complete Circle CIO Gurmeet Chadha took to X (formerly Twitter) to criticize the company’s corporate language and AI-driven job cuts.
Chadha wrote, “Amazon is laying off 10000 more people after laying off 18k in November. They call their HR heads as People Experience Head, Chief People Officer and fancy names… employees r called families. Sab drama!!”
Chadha argued that technology should not come at the expense of people’s livelihoods, stating, “AI or any disruption which brings misery to ur own people is useless.”
Andy Jassy’s restructuring plans have already surpassed the initial target of a 15% reduction in middle management by early 2025.
In a Bloomberg interview, Jassy defended the move, saying, “You add a lot of people and you end up with a lot of middle managers. And those middle managers, all well-intended, want to put their fingerprint on everything.”
Jassy criticized the company’s reliance on excessive pre-meetings, stating, “You end up with these people being in the pre-meeting, for the pre-meeting, for the pre-meeting, for the decision meeting.”
His goal is to empower employees to take greater ownership of their work by reducing unnecessary layers of management.
Support from Gen Z
Interestingly, Amazon’s shift toward fewer managers has been positively received by Gen Z employees, who tend to prefer self-management over traditional hierarchies. A survey by Robert Walters found that:
- 52% of Gen Z workers prefer to avoid middle management roles
- 72% seek career progression without supervisory responsibilities
This suggests that Amazon’s restructuring aligns with changing workforce preferences and could help the company retain younger talent.
Return-to-Office Controversy
Despite positive feedback on the management cuts, Amazon’s return-to-office policy remains contentious.
CEO Andy Jassy announced in September 2024 that employees would be required to work in the office five days a week starting January 2025.
AWS CEO Matt Garman supported the decision, arguing that true innovation is difficult to achieve remotely.
However, the policy has faced backlash from employees, with some “rage applying” for new jobs and others writing letters to leadership in protest.
Industry Trend of ‘Conscious Unbossing’
Amazon’s decision to cut middle management reflects a broader trend known as “conscious unbossing” — a strategy where companies reduce managerial oversight to promote individual growth and efficiency.
Other tech giants like Meta and Google have adopted similar approaches to simplify operations and increase productivity.
A Morgan Stanley report published in October 2024 estimated that Amazon’s restructuring could eliminate around 13,834 managerial roles by early 2025.
Amazon’s shift toward fewer managers is expected to reduce bureaucracy, accelerate decision-making, and enhance operational efficiency.
As Jassy noted, “Reducing the number of managers will eliminate unnecessary layers, allowing Amazon to operate more efficiently and with fewer bureaucratic obstacles.”
Workforce Adjustments Post-Pandemic
Amazon’s rapid workforce expansion during the COVID-19 pandemic saw employee numbers grow from 798,000 in 2019 to over 1.6 million by the end of 2021.
However, the company has since adjusted its staffing levels, cutting 27,000 jobs in 2022 and 2023 as part of ongoing efforts to align its workforce with business needs.
Amazon’s latest managerial cuts reflect its strategic shift toward a leaner, more efficient structure aimed at long-term profitability and growth.
