Amazon Inc. AMZN CEO Andy Jassy has expressed his disdain for bureaucracy and announced plans to reduce managerial layers within the company
What Happened: In a company-wide meeting on Tuesday, Jassy outlined the company’s decision to cut down on the number of managers.
The move was aimed at speeding up decision-making processes and preserving Amazon’s unique culture, which Jassy believes is being stifled by excessive management layers, reported Business Insider, citing a recording of the meeting.
“The goal again is to allow us to have higher ownership and to move more quickly,” Jassy stated during the meeting.
Amazon announced in September that it plans to increase the ratio of individual workers to managers by 15% by the end of the first quarter of 2025.
As part of this initiative, Amazon launched a “Bureaucracy Mailbox” last month, where employees can voice concerns about unnecessary processes or rules.
Jassy revealed that over 150 suggestions received through this platform have already been acted upon.
“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.”
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Why It Matters: For the third quarter of 2024, Amazon reported net sales of $158.9 billion, up 11% year-over-year, beating Street consensus estimates.
Operating income for the third quarter reached $17.4 billion, an increase from $11.2 billion in the same period last year. Amazon Web Services, or AWS, was the primary driver, contributing $10.4 billion in operating income, compared to $7 billion in the third quarter of the previous year.
Amazon has also been expanding its partnerships and initiatives, including a collaboration with Meta Platforms Inc., Microsoft Corp., and others on a defense AI initiative.
However, the company has also faced internal challenges. Last month, AWS CEO Matt Garman defended the company's contentious new five-day in-office policy, suggesting that those who oppose it may consider other employment options.
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