Amazon is taking a cautious approach to hiring for its corporate workforce, with corporate headcount down slightly year-over-year. This is a significant change from the rapid growth seen in previous years when the company’s corporate headcount tripled. In an effort to curb costs, Amazon laid off 27,000 corporate workers last year and is continuing to make cuts. Amazon CEO Andy Jassy has announced plans to thin the company’s management ranks, with a goal of increasing the ratio of individual contributors to managers by at least 15% by the end of Q1 2025. Analysts believe this initiative could lead to savings of $2 to $4 billion in 2025.
Amazon’s full return-to-office policy starting early next year has caused concern among some employees, with some stating that they are looking for a new job due to the change. Amazon’s corporate workforce numbered around 350,000 in early 2023, but the company has not provided an updated number since then. The overall headcount growth for Amazon as of Sept. 30 was 1.55 million employees worldwide, representing a 3% increase year-over-year, driven by growth in the operational workforce.
Layoffs have affected tech companies of all sizes during a broader industry slowdown, with more than 264,000 tech workers laid off last year. While workforce cuts have slowed since then, companies are still trimming headcount, with Dropbox announcing a 20% reduction in staff. Amazon’s cautious hiring approach and focus on cost-cutting measures reflect the company’s efforts to adapt to changing market conditions and prioritize efficiency. The company’s decision to streamline its management ranks and increase the ratio of individual contributors to managers is aimed at reducing overhead and improving operational speed.
Analysts with Morgan Stanley anticipate significant savings for Amazon as a result of these initiatives, with potential reductions in employee headcount. Amazon’s move to a full return-to-office policy may lead to further changes within the company as employees adjust to the new working environment. The company’s focus on managing costs and optimizing its workforce reflects a broader trend in the tech industry towards efficiency and adaptability. As Amazon continues to navigate the current business landscape, the company’s strategic decisions regarding hiring and workforce management will be crucial in determining its long-term success and growth.
