Amazon plans to cut 14,000 managerial roles amid cost-cutting push: Report

Amazon plans to cut 14,000 managerial roles amid cost-cutting push: Report

  • 18.03.2025 18:28
  • thetechportal.com
  • Keywords: Layoffs

Amazon plans to cut 14,000 managerial roles globally as part of a cost-cutting initiative aimed at improving efficiency. The layoffs will not affect warehouse or delivery staff but are expected to save between $2.1 billion and $3.6 billion annually. Other major companies like Meta have also announced similar workforce reductions in recent months.

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Amazon

Amazon

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Analyst rating: Strong buy

Amazon is planning to cut 14,000 managerial roles as part of a cost-cutting initiative.

Meta Platforms Inc.

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Analyst rating: N/A

Meta plans to lay off around 3,000 to 3,500 employees in February 2025.

Context

Analysis of Amazon's Managerial Layoffs: Business Insights and Market Implications

Cost-Cutting Measures

  • 14,000 managerial positions to be cut by early 2025, affecting only corporate employees, not warehouse or delivery staff.
  • Reduction represents 13% of the current managerial workforce, from 105,770 to 91,936 managers.

Workforce Impact

  • Annual savings projected: $2.1 billion to $3.6 billion, based on annual costs per manager ($200,000 to $350,000).
  • Managers instructed to supervise at least eight direct reports, up from six, to streamline operations and flatten hierarchy.
  • Temporary hiring freeze for new managers to assess structural changes.

Financial Context

  • 2024 financial highlights:
    • Net sales: $638.0 billion, up 11% from $574.8 billion in 2023.
    • Operating income: $68.6 billion.
    • Net income: $59.2 billion.

Industry Trends

  • Part of a broader tech industry trend, with Meta planning layoffs of 3,000 to 3,500 employees in February 2025.

Strategic Considerations

  • CEO Andy Jassy aims for a 15% increase in the ratio of individual contributors to managers by Q1 2025.
  • Focus on reducing bureaucracy and improving decision-making efficiency.

Long-Term Effects

  • Potential impact on company culture, employee morale, and innovation versus cost-saving.
  • No explicit mention of regulatory implications but could attract labor law scrutiny due to scale of layoffs.