Morgan Stanley claims Amazon is considering laying off 14,000 managers from its 1.5 million-employee workforce. This is because the company is planning to reduce its managerial staff and it could lead to significant layoffs and cost-cutting measures.
In a memo, CEO Andy Jassy announced his intention to increase the proportion of individual contributors to managers by at least 15 percent by the end of the first quarter of 2025. Jassy further explained that reducing the number of managers will streamline the organisational structure, allowing Amazon to operate more efficiently and avoid bureaucratic delays.
Morgan Stanley Sees Big Savings From Amazon Layoffs
A study by Morgan Stanley published on Thursday estimates that this initiative could eliminate approximately 13,834 managerial positions by early next year, resulting in cost savings of between $2.1 billion and $3.6 billion.
According to Morgan Stanley's estimate, which assumes that seven percent of Amazon's employees hold managerial positions, the company currently has around 105,770 managers worldwide. This number is projected to decrease to 91,936 by the first quarter of next year.
Amazon keeps information about the composition of its workforce private. However, Amazon informed Business Insider that it has significantly increased its managerial staff in recent years and believes that now is an appropriate time to implement this structural adjustment.
The company stated that each team will evaluate its organisational structure, and there is a possibility that certain roles may be eliminated if they are deemed unnecessary. Amazon added that this change aims to enhance its corporate culture and organisational effectiveness.
Morgan Stanley's estimate assumes that the annual cost per manager ranges from $200,000 to $350,000. Based on these figures, Amazon could potentially save between $2.1 billion and $3.6 billion next year by eliminating 13,834 managerial positions.
According to Morgan Stanley's analysis, these savings represent approximately three percent to five percent of Amazon's projected operating profit for 2025. Amazon employs over 1.5 million people worldwide.
A significant portion of Amazon's workforce is engaged in warehouse and logistics operations rather than corporate roles. Morgan Stanley views these potential changes as a major opportunity for Amazon to improve its operational efficiency.
Amazon has a history of conducting significant layoffs. In January of the previous year, the company announced plans to eliminate over 18,000 jobs, citing economic uncertainty. Subsequently, in March 2023, the retailer laid off an additional 9,000 employees across its various divisions.
Amazon's Hiring Spree Amidst Layoffs
In a stark contrast to its recent layoff spree, Amazon announced on Thursday that it is hiring a massive 250,000 employees across the United States in preparation for the upcoming holiday season.
"The holiday season is always exciting for Amazon and our customers, and it's a time when we create a lot of new jobs for people who want to earn extra money for a few months or kick off a career at Amazon," the company's Vice President, Global Operations Employee Experience, Sandy Gordon, wrote a new blog post.
Gordon stated that this year, Amazon is actively recruiting for 250,000 full-time, part-time, and seasonal positions within its customer fulfilment and transportation operations across the United States. The company expressed its enthusiasm for welcoming new team members from all corners of the country.
How to Join Amazon's Holiday Hiring Surge
Amazon is streamlining the application process for its holiday hiring blitz! You can now receive a contingent job offer on the spot when you apply for a position. Whether you're interested in a part-time role (as few as 20 hours a week) to earn extra cash or launch a career with Amazon, the company has opportunities for you.
Explore current openings at amazon.com/localjobs or text NEWJOB to 31432 to receive job alerts directly. Remember, new roles are posted throughout the holiday season and fill up fast, so check back frequently for updates.
