Amazon CEO Andy Jassy, 57, is on a mission to reduce Amazon’s layers of middle management.
At a leaked all-hands meeting last week, Jassy answered a question from an employee about how he intends to run Amazon like the world’s biggest startup. According to a recording of the meeting obtained by Business Insider, Jassy said that Amazon is committed to reducing its middle-manager headcount and that the path to a promotion at Amazon is not by taking charge of a massive team.
“The way to get ahead at Amazon is not to go accumulate a giant team and fiefdom,” Jassy said, per the recording. “There’s no award for having a big team.”
Jassy told Amazon employees that the best leaders are the most effective, getting the job done with the least amount of resources and the fewest number of people on their teams. He said that some of the most successful products in Amazon’s cloud business, Amazon Web Services (AWS), started with a team of about a dozen people, not a team of at least 50.
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AWS brought in $107.6 billion in revenue for Amazon in 2024, a 19% year-over-year increase and the first time the business crossed the $100 billion mark. Amazon as a whole brought in a total revenue of $638 billion in 2024.
Andy Jassy. Photographer: Michael Nagle/Bloomberg via Getty Images
Jassy first announced in September that Amazon would be reducing its number of middle managers by the end of March. At the time, Jassy asked every senior leadership team to “increase the ratio of individual contributors to managers by at least 15% by the end of Q1 2025.”
A Morgan Stanley note to investors in October approximated that Amazon could let go of up to 13,834 managers out of its 105,770 managers overall under Jassy’s guidelines.
However, mass layoffs haven’t happened (though Amazon did conduct a small round of layoffs in January that affected dozens of employees in its communications and sustainability departments). Instead, Amazon achieved its goal by combining teams and moving some managers down a level in position.
“In September 2024, we shared with employees that we set a goal to increase the ratio of individual contributors to managers by 15% across our organizations,” Amazon told Fast Company in an emailed statement last week. “There are a number of ways to achieve that increase without eliminating roles. We’ve now reached that goal.”
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According to Indeed data, an Amazon manager makes an average salary of $133,933 per year. The latest version of Deloitte’s annual Human Capital Trends Report, released earlier this week, shows that more than a third of a group of 10,000 surveyed managers reported feeling unprepared to handle the people management aspect of their jobs. Nearly 40% of their time was spent on administrative tasks.
Amazon had 1.55 million employees as of the fourth quarter of 2024, with its corporate workforce numbering around 350,000. The company recently implemented a return-to-office policy in January that, so far, has encountered difficulties, like a lack of desk space and parking for employees.
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