By early 2025, Amazon Plans to Eliminate 14,000 Managerial Positions

By early 2025, Amazon plans to let off 14,000 administrative staff members as part of a comprehensive restructuring strategy meant to boost productivity and cut expenses. It is anticipated that Amazon will save between $2.1 billion and $3.6 billion a year as a result of the decision, which represents a 13% drop in the company's global management personnel. Following recent layoffs in Amazon's sustainability and communications departments, this most recent round of layoffs represents a larger change in the company's corporate structure. The choice is in keeping with CEO Andy Jassy's continuous attempts to reduce organisational complexity and streamline processes. In an effort to improve operational efficiency and speed up decision-making, Amazon intends to raise the proportion of individual contributors to managers by at least 15% by the first quarter of 2025. Jassy has been outspoken about cutting back on bureaucratic layers that impede operations, according to sources Business Insider reported. This supports his goal of having Amazon operate more like a quick-thinking company.

Amazon Restructuring its Work Operations

In order to facilitate this new change, Amazon has implemented a new "bureaucracy tipline" that enables staff members to report organisational inefficiencies. In order to save expenses, managers have also been instructed to limit senior hiring, increase the number of direct reports, and reevaluate pay structures. These actions are a part of a larger effort to retain Amazon's intense focus on profitability while establishing a leaner corporate structure. During the pandemic, Amazon's employment increased quickly, from 798,000 workers in 2019 to over 1.6 million by the end of 2021. However, the business started adjusting its staffing levels when customer demand levelled out. In an attempt to reduce costs, Amazon has already let go of 27,000 workers during the last two years, most of whom were in corporate positions. It employed almost 1.5 million people worldwide by the end of 2024, including 350,000 corporate staff and more than a million frontline workers in delivery and warehousing operations. However, the most recent layoffs represent a dramatic change in strategy, focusing on managers rather than entry- or mid-level workers.

Reason for Layoffs

The reorganisation coincides with mounting financial strains, such as heightened investor monitoring and a cutthroat e-commerce environment that necessitates greater efficiency. According to analysts, Amazon's growing dependence on automation and artificial intelligence has also lessened the need for traditional administrative oversight, increasing the replaceable nature of middle-management positions. Additionally, there have been rumours that Amazon is promoting voluntary attrition as part of its personnel reduction strategy in response to its new return-to-office mandate. Amazon has already started implementing the layoffs in stages. The North American Stores segment laid off 200 employees in January 2025, and the communications and sustainability departments also saw layoffs. According to a Morgan Stanley report from late 2024, Amazon's reorganisation would eventually result in the elimination of about 14,000 managerial positions, which would change the company's leadership dynamics and result in considerable cost savings.