Amazon is preparing to implement a significant managerial restructuring that could see the elimination of approximately 14,000 managerial roles by early 2025. This move, driven by CEO Andy Jassy’s focus on improving the company’s operational agility, is expected to save between $2.1 billion and $3.6 billion annually. According to a Morgan Stanley report, the reduction would decrease Amazon’s global management workforce from 105,770 to 91,936, helping the e-commerce giant navigate the evolving demands of the market.
The restructuring aims to increase the ratio of individual contributors to managers by at least 15% by the first quarter of 2025. Jassy envisions a leaner, more dynamic company that can make faster decisions and foster stronger collaboration, aligning with his goal for Amazon to “operate like the world’s largest startup.” This shift comes in response to Amazon’s recent over-hiring of managers, which the company admitted to Business Insider.
While the exact number of positions to be cut has not been finalized, every team across the company will review its organizational structure, and some managerial roles may be eliminated. The goal is to remove unnecessary layers of management to streamline decision-making processes and improve overall efficiency.
With managerial positions costing between $200,000 and $350,000 per year, Morgan Stanley estimates that reducing 14,000 roles could significantly contribute to Amazon’s bottom line, potentially boosting its operating profit by 3% to 5% by 2025. This strategy marks a critical step in Amazon’s efforts to remain competitive, ensuring the company is better positioned to meet the challenges of a rapidly changing marketplace.
