Bad News! Amazon May Cut 14,000 Managerial Jobs by 2025 to Save $3 Billion Annually: Reports

New Delhi: Though an official confirmation is awaited, Amazon is expected to cut around 14,000 managerial positions by early 2025, according to a recent analysis by Morgan Stanley. The cost-saving measure could help the e-commerce giant save up to $3 billion annually.

This decision is part of CEO Andy Jassy's broader strategy to streamline operations and improve efficiency. Jassy aims to increase the ratio of individual contributors to managers by at least 15% by the end of the first quarter of 2025.  

Amazon is set to make sweeping changes to its management structure as part of a larger effort to streamline operations and improve efficiency. CEO Andy Jassy has outlined a vision to transform Amazon into a more agile organization, operating with the mindset of the "world's largest startup." Jassy has emphasized the importance of "strong urgency, high ownership, fast decision-making, scrappiness and frugality, deeply-connected collaboration" as the company moves forward with its restructuring plans.

According to a report by Morgan Stanley, Amazon could potentially reduce its global management workforce from 105,770 to around 91,936 employees by early 2025. This cut would result in annual cost savings estimated between $2.1 billion and $3.6 billion, which represents 3% to 5% of the company’s projected operating profit for 2025.  

In a statement to a leading Business portal, Amazon acknowledged that it has "added a lot of managers" recently and believes "now is the right time" to reassess its structure.

While the company confirmed that every team will be reviewing its management layers, it has not committed to specific job cuts. "It's possible" that some roles may be eliminated as part of the process, but Amazon has also indicated that some managers could be reassigned to new roles.

The restructuring is intended to eliminate unnecessary layers within the organization and reduce bureaucratic barriers, allowing Amazon to become more agile.

The shift aligns with Jassy's goal to increase the ratio of individual contributors to managers by at least 15% by the end of Q1 2025. Morgan Stanley's analysis suggests that approximately 7% of Amazon 's workforce currently holds managerial positions, with the cost per manager estimated between $200,000 and $350,000 annually.