Amazon‘s AWS division is implementing strict new guidelines for its sales organization, requiring managers to oversee more direct reports and potentially demote some leaders to individual contributor roles, according to internal documents obtained by Business Insider.
The directive mandates AWS sales managers to handle a minimum of eight direct reports, up from the previous requirement of six, as part of CEO Andy Jassy’s September announcement to increase the ratio of individual contributors to managers by 15% by March’s end.
“I hate bureaucracy,” Jassy said during a November all-hands meeting, addressing employee concerns about the reorganization. The CEO attributed the changes to Amazon’s pandemic-era hiring spree, which he said “stretched” the company and led to slower decision-making.
The guidelines also call for a temporary pause on new manager hiring until the team can fully assess the organizational changes’ impact. This follows an internal finding from April that revealed middle management hiring had outpaced entry-level recruitment, driving up costs.
According to Business Insider, some AWS employees report that several managers have already been “down leveled” to individual contributor roles, resulting in reduced pay bands. The changes are creating uncertainty within the organization, with one former employee noting that promotion criteria now requires managers to oversee larger teams.
Amazon’s spokesperson clarified that while these guidelines might apply to specific teams, they aren’t company-wide mandates. “Individual units communicate directly with employees as they make changes to their structures under the broad mandate of creating customer-centric, agile organizations that empower fast decision-making,” the spokesperson said.
The reorganization has reportedly fostered a culture of apprehension among employees. “No one wants to be the one that failed,” one employee told Business Insider, suggesting that managers are becoming increasingly risk-averse to avoid becoming targets for cuts.
Bank of America analysts estimate Amazon could save approximately $1.5 billion annually through these management reductions, joining other tech giants like Meta in trimming supervisory roles.