In a bold move to combat bureaucracy and accelerate decision-making, Amazon CEO Andy Jassy has announced plans to reduce managerial layers within the company. This decision, revealed during a company-wide meeting on Tuesday, reflects Jassy’s belief that excessive management hinders Amazon’s unique culture and agility.
According to Business Insider, citing a recording of the meeting, Jassy emphasized the importance of empowering employees and fostering a more streamlined approach. “The goal again is to allow us to have higher ownership and to move more quickly,” he stated.
This initiative is part of a broader strategy announced in September, aiming to increase the ratio of individual workers to managers by 15% by the end of the first quarter of 2025. To gather feedback and identify areas for improvement, Amazon launched a “Bureaucracy Mailbox” last month, providing a platform for employees to voice their concerns about unnecessary processes or rules. Jassy revealed that over 150 suggestions received through this platform have already been implemented.
“The reality is that the S team and I hate bureaucracy,” Jassy said, referring to Amazon’s senior leadership team. “One of the reasons I’m still at this company is because it’s not a political or bureaucratic place.”
This move comes amidst a period of strong financial performance for Amazon. In the third quarter of 2024, the company reported net sales of $158.9 billion, representing an 11% year-over-year increase and exceeding Street consensus estimates. Operating income for the quarter reached $17.4 billion, significantly higher than the $11.2 billion reported in the same period last year. Amazon Web Services (AWS), the company’s cloud computing division, continues to be a key driver of growth, contributing $10.4 billion in operating income during the quarter.
While Amazon navigates a period of growth and expansion, the company has also faced internal challenges. Last month, AWS CEO Matt Garman defended the company’s new five-day in-office policy, suggesting that those who oppose it may consider other employment options. This policy has sparked internal debate and highlights the complexities of managing a large and diverse workforce.
Jassy’s focus on reducing bureaucracy and empowering employees signals a commitment to maintaining Amazon’s competitive edge in a rapidly evolving technological landscape. As the company continues to expand its reach and partnerships, the success of these initiatives will play a crucial role in shaping Amazon’s future trajectory.
