This is a sign of the times.
Amazon announced that, after an efficiency review, are going to eliminate the number of managers with the company. This is going to eliminate somewhere around 14K management positions.
It is no uncommon for a company to do this as it grows. One of the things that usually accompanies growth is bloat. Entities tend to get fat, often at the management level. Suddenly, someone wakes up and says "where did we get all these people".
In this article we will go through this and try to access what is happening.
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Amazon, the largest e-retailer in the world, is reportedly planning to reduce its managerial staff to save costs as part of an efficiency drive. Morgan Stanley recently conducted an analysis, predicting that managers' routine could be reduced in early 2025, and about 14 thousand individuals could lose their occupations.
This strategic decision could cost between $2.1 billion and $3.6 billion per year, which is almost in line with the company’s efforts to eliminate wasteful expenses and adapt a more entrepreneurial culture within its large corporate entity.
Under ordinary circumstances, this might be the end of the story. The idea that a company has bloat, then decides to cut it, is commonplace.
However, this is not a normal company. It is Amazon, one of the leading technology companies in the world. This will make one wondr.
It is also compounded by the fact that it is now run by Andy Jassy. He is the CEO, a position he formerly held with Amazon Web Services.
We now have someone who is running Amazon was the head the techiest part of the company. This brings up the question if something else is taking place.
My guess is we are seeing a combination of the two factors.
Naturally, bloat cutting could be needed. That said, my guess is we are looking at a situation where a transition it taking place. This is starting with technology companies yet will move elsewhere.
The technology revolution that is taking place is going to cost jobs. We see this arising in Silicon Valley, the firms that are accustomed to implementing technology.
When Elon Musk took over Twitter, he fired 75% of the staff. While he did hire some back, the headcount is down by a great deal since he bought it. This shows how technology companies were operating.
This is not surprising. Often, tech employees automate larger portions of their jobs, then coast. We saw this with many videos posted on sites such as TikTok. Once stock prices started to fall, and investors started screaming, the party was over.
Facebook (Meta), Google, and others started to cut headcounts. These jobs will never return.
Amazon is going to streamline its decision making process. On the surface, that looks like eliminating layers of management. While this is certainly a portion of the equation, do not be surprised if much of this is based around technology.
You know Jassy is accustomed to refining operations with technology. He is likely going to expand this across the entire company. I would not be surprised if the 14K is just the start. There will still be over 90K managers with that company.
A lot is going to change in the next 24 months. It will be interesting to watch where it all goes.
