Amazon is looking to cut managerial layers, by eliminating about 14,000 manager positions by early 2025. This move will also help the e-commerce firm save up to $3 billion annually even while improving efficiency and agility, as per an analysis by Morgan Stanley. The cost savings would probably make up at least about three per cent of Amazon’s anticipated operating profit for 2025.
With lesser managerial roles, the ratio of individual contributors to managers will improve by at least 15 per cent by the end of the first quarter of 2025. To better this ratio, the company may even look at assigning new roles to managers say media reports.
A flatter organisational structure will facilitate faster decision-making. It will allow employees to act fast, increase accountability, and lead to a stronger sense of belongingness and ownership. With bureaucracy reduced, decisions will be made faster, especially when it comes to customer-related issues.
The e-commerce giant has expressed the desire to function as a big startup; it has been indicating the need to be more prudent and frugal for a while now. It has been emphasising on the benefits of stronger collaboration and faster decision-making too.
Business Insider reveals that about seven per cent of the Amazon workforce is made of managerial roles, although the exact numbers are not known. The company reportedly had about 1.05 lakh managers, globally, at the end of Q2 of 2024. If the layoffs take place, the number will come down to about 91,000 odd by 2025. Presently it has more than 1.5 million members in its global workforce.
