A Vision for a Leaner Organization

Andy Jassy, the 57-year-old CEO of Amazon, is actively seeking to minimize the layers of middle management within the company. This initiative was discussed during a recent all-hands meeting, where Jassy emphasized his vision of treating Amazon as the world’s largest startup.

Promotion Pathways Redefined

During the meeting, Jassy clarified the new expectations for employees looking to advance their careers at Amazon. He stated, “The way to get ahead at Amazon is not to go accumulate a giant team and fiefdom. There’s no award for having a big team.” This approach shifts the focus from team size to efficiency and effectiveness.

Efficiency Over Size

Jassy highlighted that some of the most notable successes within Amazon Web Services (AWS) originated from small teams, often comprising around a dozen members. He reiterated that successful leaders are those who can complete tasks with fewer resources.

Recent Financial Successes

In the fiscal year 2024, AWS generated $107.6 billion in revenue, marking a 19% increase from the previous year. This achievement was part of Amazon’s broader total revenue of $638 billion for the same period.

Management Structure Enhancements

In September, Jassy introduced a strategic goal to cut down on middle management by increasing the proportion of individual contributors compared to managers by 15% by the end of the first quarter of 2025. A Morgan Stanley analysis suggested that this could lead to a reduction of approximately 13,834 managers from Amazon’s total of 105,770.

Implementation without Mass Layoffs

Despite the potential for significant reductions in managerial positions, Amazon has not conducted mass layoffs. Instead, the company has taken a different approach by merging teams and elevating individual contributors to management roles when appropriate.

Amazon stated, “There are a number of ways to achieve that increase without eliminating roles. We’ve now reached that goal.”

Current State of Employment

As of Q4 2024, Amazon’s global workforce stood at approximately 1.55 million employees, with around 350,000 in corporate roles. The company has been navigating challenges associated with its return-to-office policy, which has reportedly faced issues like inadequate desk space and parking for employees.

Managerial Insights

Data from Indeed indicates that the average salary for Amazon managers is roughly $133,933. Additionally, Deloitte’s recent Human Capital Trends Report reveals that over one-third of surveyed managers feel unprepared for their roles, spending nearly 40% of their time on administrative tasks.