Amazon CEO Jassy blasts company bureaucracy in shareholders letter

Amazon CEO Andy Jassy’s war on bloat continues.

While touting the Seattle-based tech giant’s strong 2024 in an annual letter to shareholders, Jassy explained how the company was looking at the future. He pictures even more investment in AI, and further culling of bureaucracy at the corporate level.

When Amazon announced in September it was sending employees back to the office full time, Jassy slipped in that the company would be reducing the number of managers during the first three months of 2025. The company asked each of its organizations to increase the ratio of individual contributors to managers by at least 15%. It didn’t specify whether that was meant to be through layoffs.

Jassy repeated that rhetoric Thursday in his letter to shareholders. He said Amazon strives to operate like a startup, albeit the world’s largest one.

For the Amazon chief, that means focusing on accountability and speed, echoing the sentiments of the CEO of another Seattle-based company. During a round of corporate layoffs in February, Starbucks CEO Brian Niccol said too many layers of management existed throughout the organization, making nobody accountable. Jassy, like Niccol, wants a flatter company full of “owners” — employees who make decisions based on how it would affect their livelihood.

“Owners feel accountable … that’s part of what our effort to increase the ratio of individual contributors versus managers is about,” Jassy said.

He said last fall he asked employees across the company to provide examples of stifling bureaucracy, and said he received almost 1,000 of them.

“Builders hate bureaucracy,” Jassy said in his letter. “It slows them down, frustrates them, and keeps them from doing what they came here to do.”

Jassy said managers can “confuse themselves that the way to grow and get ahead is to accumulate large teams.”

“Our best leaders get the most done with the least number of resources required to do the job,” he said. “They pride themselves on being lean.”

The company is already leaner than it was just a few years ago. In 2023, Amazon laid off 27,000 corporate employees, mimicking other tech giants that shed their workforces after pandemic-driven hiring booms. At the time, Amazon was doing it to cut down costs.

As recently as October, Amazon’s corporate head count was still on the downswing. Chief Financial Officer Brian Olsavsky said during an earnings call in October that its office workforce was down year-over-year and had stayed flat since the beginning of 2024.

While Jassy and his crew have preached trimming down at the corporate level, Amazon is investing aggressively in artificial intelligence infrastructure. The largest expenditures are data centers and computer chips, which Amazon plans to spend about $100 billion on this year.

Jassy told shareholders this rapidly growing investment is being driven by demand, which is “unlike anything we’ve seen before.”

The letter to shareholders was released the same day as a regulatory filing for Amazon’s annual shareholders meeting in May. In it are a slew of proposals shareholders will vote on that touch on the ethics of AI and Amazon’s climate policies.

The filing also disclosed Jassy’s total compensation for 2024, which rose to $40.1 million thanks to a boost in the company’s stock price. Jassy receives a base pay of $365,000, along with personal security and business travel expenses of $1.12 million. He didn’t receive any new stock awards, but some previously awarded to him vested last year with a value of $38.5 million.