Amazon Layoffs: Tech Firm To Cut 14,000 Manager Positions By 2025, Says Report

Amazon Layoffs: Jassy highlighted the importance of fostering a culture characterised by urgency, accountability, swift decision-making, resourcefulness, frugality, and collaboration

Amazon Layoffs: Amazon is reportedly planning to reduce 14,000 managerial positions by early next year in a bid to save $3 billion annually, according to a Morgan Stanley report. This initiative is part of CEO Andy Jassy's strategy to boost operational efficiency by increasing the ratio of individual contributors to managers by at least 15 per cent by March 2025. 

This initiative from the tech giant is designed to streamline decision-making and eliminate bureaucratic hurdles, as reported by Bloomberg.

Jassy highlighted the importance of fostering a culture characterised by urgency, accountability, swift decision-making, resourcefulness, frugality, and collaboration, with the goal of positioning Amazon as the world’s largest startup. 

Jassy also introduced a "bureaucracy tipline" that allows employees to report unnecessary procedures that hinder their work, according to the report.

Morgan Stanley estimates that this job reduction could shrink Amazon's management workforce from approximately 105,770 to around 91,936 globally as the estimated annual cost per manager ranges from $200,000 to $350,000, resulting in annual savings between $2.1 billion and $3.6 billion. This would account for 3 per cent to 5 per cent of Amazon's projected operating profit for 2025. 

While Amazon has acknowledged the recent expansion of its management ranks and noted the necessity for a review of team structures, the company has not specified any definitive job cuts. The restructuring aims to streamline operations and minimize bureaucratic obstacles, potentially achieving the desired ratio change through reassignment rather than direct layoffs.

Morgan Stanley believes this move will be advantageous for Amazon. Its report states, "Removing layers, operating with fewer managers and flattening the organization are all in focus to move faster." 

Meanwhile, Amazon's CEO announced that the company plans to require employees to return to the office full-time starting in January next year. The firm has already laid off thousands of employees in several rounds of layoffs this year as the tech industry, in general, is facing difficult times.