F. Carter Smith/Bloomberg via Getty Images; Chelsea Jia Feng/BI
Amazon wants fewer managers. CEO Andy Jassy believes it will root out bureaucracy.
During an internal all-hands meeting on Tuesday, Jassy explained why the company recently announced a plan to reduce the number of managers.
The goal is to make faster decisions and reduce management layers that are killing Amazon's unique culture, he said during the meeting, a recording of which was obtained by Business Insider.
Amazon went on a massive hiring spree during the pandemic, which created "more layers" that "stretched" the company and led to a slower decision-making culture.
"The goal again is to allow us to have higher ownership and to move more quickly," Jassy said.
Jassy also addressed a number of employee questions, including the rationale behind a strict new return-to-office mandate.
Amazon announced in September that it plans to increase the ratio of individual workers to managers by 15% by the end of 2025's first quarter. An internal document showed that the change could result in role eliminations as the company identifies redundant positions, BI previously reported.
An Amazon spokesperson declined to comment.
Peter DeSantis, AWS's senior vice president of utility computing, also spoke during Tuesday's meeting to stress that the company needs to move faster. He said the company created a new software builder experience team in recent years to address some of these challenges. To make this work better, DeSantis added, line managers and organizational leaders have to pay more attention to their individual teams.
"I think it's very important that we make these centralized investments, but I also think that ultimately developer productivity and happiness and being able to focus on the business over time requires our leaders across the company to make the right priorities," DeSantis said.
As part of this plan, Amazon also announced a new "bureaucracy mailbox" last month, where employees can raise concerns about unnecessary and excessive processes or rules that need to be fixed. Jassy said Tuesday that he's received more than 500 emails and the company has taken action on over 150 of those suggestions.
"The reality is that the S team and I hate bureaucracy," Jassy said, referring to Amazon's most senior leadership team. "One of the reasons I'm still at this company is because it's not a political or bureaucratic place."
Jassy said these changes are necessary given the rapidly changing technology landscape and growing competitive pressure, particularly with AI. Only a few companies survive for 50 or 100 years in the tech industry because "the world changes, technology changes, competitors change, companies change," he said.
"We have a chance to build the most remarkable company in the history of business," Jassy said. "But I also would say that I'm not sure that there's been a more important time in the history of this company with the way technology is changing, especially with AI, for us to be well set up to innovate together and to collaborate together and to be connected to one another and to understand the culture, and that's what we're optimizing for."
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