'I Hate Bureaucracy': Leaked Internal Amazon Document Reveals How the Tech Giant Is Cutting Down on Middle Management

Jan 31, 2025 04:58 AM - 1 week ago 11105

Amazon announced connected Wednesday that it was laying disconnected dozens of workers successful its communications and sustainability departments, and earlier this month, the institution fto spell of 200 employees from its North America stores team. It's only the beginning.

In September, Amazon CEO Andy Jassy announced that the institution would beryllium eliminating excess layers of mediate guidance by the extremity of March. Now, a leaked Amazon Web Services (AWS) income team guidelines document, obtained by Business Insider connected Thursday, sheds ray connected really those middle-manager cuts will happen.

The archive tells AWS income managers to summation their number of nonstop reports, region hiring caller managers, and demote immoderate managers down a level to a non-managerial position of little pay. An Amazon spokesperson did not corroborate the soul guidance to BI. AWS had astir 115,000 employees retired of Amazon's full 1.55 million.

When it comes to nonstop reports, the leaked archive requires managers to person astatine slightest 8 squad members, up from the six that Amazon laminitis Jeff Bezos required successful 2017.

The AWS income squad guidelines besides advised a region connected hiring caller managers, stating that the squad had hired much managers than entry-level labor successful the past fewer years, driving costs up. Amazon's building had go much diamond-shaped than pyramid-shaped, the archive stated, referring to the heavier mediate guidance layer.

The last proposal successful the leaked archiving was to move managers down a level to individual contributors, which has a little salary range. Two AWS labor told BI that this had already happened to respective managers.

Andy Jassy. Photo by Noah Berger/Getty Images for Amazon Web Services

These changes get successful consequence to Jassy's September note, which asked each elder activity squad to "increase the ratio of individual contributors to managers by astatine slightest 15% by the extremity of Q1 2025."

Related: 'Not a Cost Play': Amazon CEO Clarifies Why Employees Have to Come Back to the Office

A Morgan Stanley note to investors successful October estimated that Amazon could fto spell of 13,834 managers nether Jassy's guidelines, assuming that 7% of Amazon's workforce is management. Amazon had 105,770 managers arsenic of the 2nd 4th of 2024 and would trim that number down to 91,936 managers by the first 4th of 2025, per the note.

Morgan Stanley estimated that if Amazon's costs per head ranged from $200,000 to $350,000 per year, Amazon would prevention betwixt $2.1 cardinal and $3.6 cardinal by reducing its head headcount.

At a November all-hands meeting, Jassy explained that changes to mediate guidance were basal to support Amazon competitive. He had created a "Bureaucracy Mailbox" successful September for Amazon labor to email him examples of excessive processes aliases rules that could beryllium eliminated. As of November, that inbox had received more than 500 emails, pinch Amazon taking action connected much than 150 worker suggestions.

"The reality is that the [senior activity team] and I dislike bureaucracy," Jassy said. "One of the reasons I'm still astatine this institution is because it's not a governmental aliases bureaucratic place."

Related: I Tried Buying a Car connected Amazon. Here Are the Pros and Cons.

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