Amazon plans to lay off 14,000 managerial positions to save $3.5 billion annually

Amazon is set to cut around 14,000 managerial positions by early 2025, aiming to save between $2.1 billion and $3.6 billion annually. This reduction marks a 13% drop in Amazon’s global management workforce, shrinking the number of managers from 105,770 to 91,936.

This move follows recent layoffs in Amazon’s communications and sustainability units, as the company pushes to streamline operations and restructure teams.

According to Business Insider, the job cut is part of CEO Andy Jassy’s strategy to simplify decision-making and speed up processes. Last month, Jassy announced plans to boost the ratio of individual contributors to managers by at least 15% by the end of the first quarter of 2025. He emphasized that reducing managerial layers would streamline operations and enable Amazon to make faster decisions without getting bogged down by bureaucracy.

In a note released Thursday, Morgan Stanley projected that Amazon’s plan could cut around 13,834 managerial roles by early next year, saving the company between $2.1 billion and $3.6 billion. The estimate is based on the assumption that managers make up 7% of Amazon’s workforce.

“Morgan Stanley estimated that this effort could lead to the elimination of roughly 13,834 manager roles by early next year, resulting in cost savings of $2.1 billion to $3.6 billion,” Business Insider reported.

As part of this plan, Amazon has launched a “bureaucracy tipline,” encouraging employees to flag inefficient procedures that slow down work. Managers have also been instructed to increase their direct reports, limit senior hires, and review pay structures to support the shift toward a leaner management model.

This layoff wave continues Amazon’s cost-cutting efforts that saw over 27,000 job cuts in 2022 and 2023. The company has also pulled back on projects that didn’t yield profits, including its “Try Before You Buy” clothing initiative and a speedy brick-and-mortar delivery service.

Amazon’s workforce saw significant growth during the pandemic, swelling to over 1.6 million by the end of 2021, up from 798,000 in late 2019. Although numbers have dipped since then, the company is still recalibrating its staffing needs.

Earlier this year, Amazon mandated that corporate employees return to the office five days a week. Some staff were asked to relocate to designated office hubs, prompting some to leave rather than move.

Management restructuring is another key part of Jassy’s approach, with efforts to reduce layers between employees and leadership.

This move places Amazon alongside other tech companies trimming their workforce. Layoffs.FYI, a site tracking job cuts in tech, reports that 81 tech companies have eliminated 22,692 jobs so far this year.