Amazon may eliminate approximately 14,000 manager positions by early 2025, potentially saving up to $3 billion per year, according to a recent Morgan Stanley analysis. This move aligns with CEO Andy Jassy's goal to increase the ratio of individual contributors to managers by at least 15% by the end of Q1 2025.
Jassy aims to increase the ratio of individual contributors to managers by at least 15% by the end of Q1 2025. These changes are part of Amazon's broader effort to "operate like the world's largest startup," with Jassy emphasising the need for "strong urgency, high ownership, fast decision-making, scrappiness and frugality, deeply-connected collaboration."
The estimate, according to Morgan Stanley, suggests that Amazon could reduce its management workforce from about 105,770 to 91,936 globally. This reduction would result in annual cost savings between $2.1 billion and $3.6 billion, representing 3% to 5% of Amazon's projected 2025 operating profit.
Amazon confirmed to Business Insider that it has "added a lot of managers" recently and believes "now is the right time" to make this change. The company stated that every team will review their structure, and it's "possible" that some roles may be eliminated.