New Delhi: Amazon is set to do away with 14,000 managerial positions over the next few months to try and save between US$ 2.1 billion and US$ 3.6 billion annually. The company also hopes to bring about greater efficiency in its operations by reducing its global management workforce by 13%. The number of managers will now come down to 91,936 from 105,770.
According to Business Insider, the job cuts is part of CEO Andy Jassy’s strategy to simplify decision-making and enhance efficiency. Jassy has outlined plans to increase the ratio of individual contributors to managers by at least 15% by the first quarter of 2025, aiming to reduce bureaucracy and speed up operations.
A Morgan Stanley report states that Amazon’s restructuring could do away with nearly 13,834 more managerial roles by early next year. This would result in further cost saving.
Amazon has recently laid off staff in its communications and sustainability units, in a bid to streamline operations and restructure teams. As part of its cost-cutting strategy, Amazon has introduced a ‘bureaucracy tipline’ that allows employees to flag inefficiencies. Managers have also been directed to increase the number of direct reports, limit hiring at senior levels and review pay packages.
Amazon hired extensively during the pandemic years. It’s workforce expanded from 7,98,000 in 2019 to over 1.6 million by the end of 2021. Later, the company started recalibrated its staffing needs, laying off 27,000 people between 2022 and 2023.
“These changes align with Amazon’s broader efforts to streamline operations and focus on profitability. The company has already shut down initiatives such as its “Try Before You Buy” clothing program and a rapid brick-and-mortar delivery service,” an analyst said.