Amazon may lay off nearly 14,000 employees as it resumes 5-day work week!

Author | Yi Xin@

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In 2024, the global wave of technology layoffs continues.

According to Layoffs.fyi, an independent layoffs tracker, 254 companies have laid off 60,000 people this year, following major layoffs in 2022 and 2023. Companies such as Tesla, Amazon, Google, TikTok, Snap and Microsoft made large-scale layoffs in the first quarter of 2024. Some smaller startups have also made significant layoffs, and some have even shut down their businesses completely.

Although the stock market and exchange rate have been rising in recent days, for some companies, a chill is still spreading.

Amazon, which resumed a five-day work week just half a month ago, has recently been caught up in a wave of negative public opinion.

It is learned that on September 16, Amazon announced that it will fully implement a new work system, and employees will return to working in the office five days a week, and will no longer adopt the hybrid working model introduced during the epidemic.

It is understood that before, Amazon employees only needed to work in the office three days a week. After the implementation of the new policy, employees are only allowed to work remotely under special circumstances.

Amazon CEO Andy Jassy said in an internal notice that the purpose of this policy is to more effectively promote communication and collaboration among employees and improve the overall efficiency of the team. He emphasized that face-to-face interaction can promote innovation and enhance team vitality, which is the key factor for Amazon to maintain its competitive advantage in the technology industry.

According to foreign media reports, many technology executives support the mandatory return to work policy, claiming that such measures are essential to improving productivity and collaboration. This statement not only highlights the shift in Amazon's operational strategy, but also reflects the broader challenges facing the technology industry in a changing work environment.

However, Amazon employees do not seem to buy into this policy and express strong opposition.

A recent survey on Blind noted that “Following the announcement, nearly three-quarters of Amazon employees (73%) said they were considering looking for another job as a result of the office work policy. ”

Due to dissatisfaction with the resumption of work policy, a large number of employees have resigned, especially in its cloud computing department.

At the same time, this return to work policy has also been criticized by the outside world. The British government believes that flexible work can improve performance and employee loyalty, while Amazon's position is exactly the opposite. They believe that working in the office can promote better collaboration and innovation.

Before one wave subsides, another wave rises.

Just when the controversy over Amazon’s resumption of work policy had not yet subsided, Amazon CEO Andy brought another piece of breaking news: cutting management levels and implementing flat management.

Andy announced that Amazon plans to increase the ratio of individual contributors to managers in each S-steam team by at least 15% by the first quarter of 2025. This decision means that many middle-level managers will face the risk of layoffs.

He said that reducing management personnel will eliminate unnecessary organizational layers and help Amazon grow faster without bureaucratic obstacles. This change is aimed at streamlining and reorganizing the management team to achieve the goals of simplifying decision-making processes, improving organizational efficiency and flexibility, and improving management systems.

Amazon emphasized that the adjustment of the work system was based on in-depth consideration of the current market environment and the company's development strategy.

According to Morgan Stanley's estimates, assuming that 7% of Amazon's employees hold management positions, the total number of managers will be approximately 105,770 by the end of the second quarter of 2024, and will drop to 91,936 in the first quarter of next year. This means that 13,834 Amazon manager positions will be eliminated.

According to foreign media reports, Amazon has added a lot of managers in recent years, and under this plan, it will eliminate positions that are no longer needed. Morgan Stanley estimates that the cost of each manager is between $200,000 and $350,000 per year. This move will help Amazon save $2.1 billion to $3.6 billion in costs, which will account for about 3% to 5% of Amazon's expected operating profit in 2025.

It is reported that Amazon has more than 1.5 million employees, most of whom work in warehouses and logistics departments.

In 2023, Amazon carried out large-scale layoffs, with 27,000 employees facing unemployment.

Faced with the double pressure of a deteriorating market environment and internal challenges, Amazon has always regarded "reducing costs and increasing efficiency" as one of the company's important strategies. While cutting staff and projects, it has launched a number of reform plans to adapt to market trends.

Although it has not explicitly stated that it will launch a layoff plan, according to foreign media reports, Amazon has already optimized its teams in other business areas in order to further invest in other key businesses. Therefore, the possibility of the plan being implemented is very high.