'i Hate Bureaucracy': Leaked Internal Amazon Document Reveals How The Tech Giant Is Cutting Down On Middle Management

Amazon announced connected Wednesday that it was laying disconnected dozens of workers successful its communications and sustainability departments, and earlier this month, nan institution fto spell of 200 labor from its North America stores team. It's only nan beginning.

In September, Amazon CEO Andy Jassy announced that nan institution would beryllium eliminating excess layers of mediate guidance by nan extremity of March. Now, a leaked Amazon Web Services (AWS) income squad guidelines document, obtained by Business Insider connected Thursday, sheds ray connected really those middle-manager cuts will happen.

The archive tells AWS income managers to summation their number of nonstop reports, region hiring caller managers, and demote immoderate managers down a level to a non-managerial position of small pay. An Amazon spokesperson did not corroborate nan psyche guidance to BI. AWS had astir 115,000 labor retired of Amazon's afloat 1.55 million.

When it comes to nonstop reports, nan leaked archive requires managers to personification astatine slightest 8 squad members, up from nan six that Amazon laminitis Jeff Bezos required successful 2017.

The AWS income squad guidelines too advised a region connected hiring caller managers, stating that nan squad had hired overmuch managers than entry-level labour successful nan past less years, driving costs up. Amazon's building had spell overmuch diamond-shaped than pyramid-shaped, nan archive stated, referring to nan heavier mediate guidance layer.

The past connection successful nan leaked archiving was to move managers down a level to individual contributors, which has a small net range. Two AWS labour told BI that this had already happened to respective managers.

Andy Jassy. Photo by Noah Berger/Getty Images for Amazon Web Services

These changes get successful consequence to Jassy's September note, which asked each elder activity squad to "increase nan ratio of individual contributors to managers by astatine slightest 15% by nan extremity of Q1 2025."

Related: 'Not a Cost Play': Amazon CEO Clarifies Why Employees Have to Come Back to nan Office

A Morgan Stanley statement to investors successful October estimated that Amazon could fto spell of 13,834 managers nether Jassy's guidelines, assuming that 7% of Amazon's workforce is management. Amazon had 105,770 managers arsenic of nan 2nd 4th of 2024 and would trim that number down to 91,936 managers by nan first 4th of 2025, per nan note.

Morgan Stanley estimated that if Amazon's costs per caput ranged from $200,000 to $350,000 per year, Amazon would prevention betwixt $2.1 cardinal and $3.6 cardinal by reducing its caput headcount.

At a November all-hands meeting, Jassy explained that changes to mediate guidance were basal to support Amazon competitive. He had created a "Bureaucracy Mailbox" successful September for Amazon labour to email him examples of excessive processes aliases rules that could beryllium eliminated. As of November, that inbox had received much than 500 emails, pinch Amazon taking action connected overmuch than 150 worker suggestions.

"The reality is that nan [senior activity team] and I dislike bureaucracy," Jassy said. "One of nan reasons I'm still astatine this institution is because it's not a governmental aliases bureaucratic place."

Related: I Tried Buying a Car connected Amazon. Here Are nan Pros and Cons.