Amazon, one of the largest e-commerce companies in the world, is planning to lay off 14,000 managers by early 2025. This decision is part of Amazon’s strategy to reduce costs and improve operational efficiency. The layoffs will reduce the number of managers globally by 13%, bringing the total down from 105,770 to 91,936 managers.
Why is Amazon Cutting Jobs?
According to reports from Business Insider, Amazon’s CEO Andy Jassy aims to simplify decision-making and increase efficiency. He plans to increase the ratio of individual contributors to managers by at least 15% by the first quarter of 2025. Jassy believes that reducing middle management will eliminate unnecessary bureaucracy and speed up company operations.
Amazon’s Cost-Cutting Strategy
Amazon hopes to save between $2.1 billion to $3.6 billion annually through these job cuts. This move follows earlier layoffs in Amazon’s communications and sustainability units, where the company also aimed to streamline operations.
In a recent interview, Andy Jassy mentioned that too many middle managers slow down the decision-making process. He criticized the culture of having multiple pre-meetings before the actual decision meeting. He emphasized that by cutting down layers of management, Amazon can empower its employees to take more ownership of their work.
AI and Automation Replacing Jobs
Many experts believe that Artificial Intelligence (AI) is playing a significant role in these job cuts. Amazon has been increasingly using AI and automation to handle various tasks, reducing the need for middle management. However, this has drawn criticism from industry leaders.
Criticism from Gurmeet Chadha
Gurmeet Chadha, Managing Partner and Chief Investment Officer (CIO) of Complete Circle, expressed strong criticism over these layoffs. In a post on X (formerly Twitter), Chadha slammed Amazon for its corporate jargon and AI-driven layoffs.
“Amazon is laying off 10,000 more people after laying off 18k in November. They call their HR heads People Experience Head, Chief People Officer, and other fancy names… Employees are called families. Sab drama!!”
Chadha emphasized that AI or any technological advancement that causes misery to people is useless. He also highlighted the philosophy of Guru Nanak Dev, stressing that innovation should focus on the welfare of all (Sarbat da Bhala).
Layoffs in Response to Market Stabilization
During the COVID-19 pandemic, Amazon’s workforce doubled, increasing from 798,000 in 2019 to over 1.6 million by 2021 due to the rise in online shopping. However, as market conditions stabilized post-pandemic, Amazon reassessed its workforce and cut 27,000 positions between 2022 and 2023.
Shift in Corporate Culture
Amazon’s restructuring efforts reflect a broader industry trend called ‘conscious unbossing,’ where companies reduce managerial oversight to promote individual growth and efficiency. Tech giants like Meta and Google are also adopting similar strategies. Interestingly, surveys have shown that 52% of Gen Z workers prefer avoiding middle management roles, and 72% want career progression without supervisory responsibilities.
Amazon’s Return-to-Office Policy
Despite these changes, Amazon’s return-to-office policy remains a point of contention. Employees are required to work from the office five days a week, which has led to backlash. Many employees have been “rage applying” for new jobs and have even written letters to leadership expressing their dissatisfaction.
Future Outlook for Amazon Employees
As Amazon continues to restructure, the focus remains on enhancing efficiency and reducing operational costs. However, these layoffs have raised concerns about the impact of AI and automation on job security.