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Amazon is set to lay off 14,000 managerial employees by early 2025 as part of a cost-cutting strategy. The move aims to save the company between $2.1 billion and $3.6 billion annually. This decision will reduce Amazon’s global management workforce by 13%, bringing the number of managers down from 105,770 to around 91,936.
Why is Amazon cutting jobs?
The layoffs are part of Amazon CEO Andy Jassy’s plan to make the company more efficient. The goal is to reduce bureaucracy and improve decision-making by increasing the number of individual employees compared to managers by at least 15%.
This decision comes after recent layoffs in Amazon’s communications and sustainability departments. The company has also been shutting down some programs, such as the “Try Before You Buy” clothing initiative and a fast delivery service for physical stores.
New Efficiency Measures at Amazon
To improve operations, Amazon has introduced several changes, including:
- A “bureaucracy tipline” where employees can report inefficiencies.
- Managers being directed to increase the number of direct reports to streamline operations.
- Limiting senior hires to control costs.
- A review of pay structures to manage expenses better.
Amazon’s Workforce Over the Years
During the COVID-19 pandemic, Amazon’s workforce doubled, growing from 798,000 employees in 2019 to over 1.6 million by the end of 2021. However, as demand stabilized, Amazon started cutting jobs. In 2022 and 2023, the company laid off 27,000 employees.
The latest round of layoffs continues Amazon’s efforts to optimize costs and improve profitability. While the restructuring may help Amazon financially, it also raises concerns about job security for its employees.
