Amazon could cut 14,000 managers soon and save $3B a year

Morgan Stanley has projected that Amazon could eliminate approximately 13,834 managerial positions, potentially saving the company between $2.1 billion and $3.6 billion in the upcoming year. This initiative is part of CEO Andy Jassy's strategy to enhance the ratio of individual contributors to managers by at least 15% by the end of the first quarter of 2025. Jassy aims to reduce bureaucratic layers within the organization to improve operational efficiency. Currently, Amazon employs around 105,770 managers, and the proposed cuts would reduce this number to about 91,936. The company has acknowledged that it has increased its managerial workforce in recent years and believes that now is an appropriate time to reassess its structure. While the layoffs are one method to achieve a leaner management structure, Amazon may also explore alternative strategies, such as reallocating managerial responsibilities. Morgan Stanley estimates that the cost of each manager ranges from $200,000 to $350,000 annually, indicating that the proposed cuts could represent 3% to 5% of Amazon's projected operating profit for 2025. The company has emphasized that the changes are aimed at strengthening its organizational culture.

- Amazon may cut 13,834 managerial roles to save $2.1 billion to $3.6 billion.

- CEO Andy Jassy aims to improve the ratio of individual contributors to managers by 15%.

- The current number of managers is approximately 105,770, which could drop to 91,936.

- The initiative is part of a broader effort to reduce bureaucracy and enhance efficiency.

- Amazon may consider alternative methods beyond layoffs to achieve its management goals.