Amazon is reportedly planning to eliminate around 14,000 managerial positions by early 2025, a move that could save the company an estimated $3 billion annually, according to an analysis by Morgan Stanley.
This initiative aligns with Amazon CEO Andy Jassy’s goal of increasing efficiency by reducing unnecessary organizational layers and enhancing the ratio between individual contributors and managers.
Fewer Managers, Faster Growth
The plan to reduce management layers is aimed at streamlining operations, allowing Amazon to grow more efficiently without bureaucratic hurdles.
According to Morgan Stanley’s analysis, Amazon could cut its global management workforce from approximately 105,770 to 91,936—a reduction of around 13,834 positions.
This reduction would save the company between $2.1 billion and $3.6 billion annually, accounting for 3% to 5% of Amazon’s projected operating profit for 2025.
Strategic Changes for the Future
Amazon has indicated that it recently added many managers and believes now is the right time to reassess its structure.
While job cuts have not been officially confirmed, the company stated that each team will review its organizational structure, which could lead to the elimination of certain roles. Some managers may also be reassigned to new roles rather than face layoffs.
Management Costs and Workforce Reduction
Morgan Stanley’s analysis assumes that about 7% of Amazon’s workforce consists of management positions, with the estimated annual cost per manager ranging between $200,000 and $350,000.
By the first quarter of 2025, Amazon is expected to reduce its global management workforce to 91,936, down from 105,770 in mid-2024.
This restructuring move is part of a broader effort by Amazon to maintain its competitive edge by optimizing its workforce and reducing operational costs.
