Amazon instructs corporate staff to spend five days a week in the office, CEO Andy Jassy he wrote in a note on Monday.
The decision marks a major shift from Amazon’s previous back-to-work stance, which required corporate workers to be in the office at least three days a week. Now, the company is giving employees until Jan. 2 to begin complying with the new policy.
Corporate employees are expected to be in the office five days a week “barring extenuating circumstances” or unless they’ve been granted an exemption by their organization’s S-team leader, Jassy said, referring to the tight-knit group of executives who report to the CEO. Amazon consultant.
“Before the pandemic, it wasn’t a given that people could work remotely two days a week, and that will also be true going forward — we expect people to be in the office outside of extenuating circumstances,” Jassi said.
Amazon also plans to simplify its corporate structure by having fewer managers in order to “remove layers and flatten organizations,” Jassy said. Each S-team organization is expected to increase its ratio of individual contributors to directors by at least 15% by the end of the first quarter of 2025, he said. Individual contributors refer to employees who do not typically manage other executives.
It is unclear whether the change will result in the elimination of some director positions. An Amazon representative did not immediately respond to CNBC’s request for comment.
The company quickly increased its workforce during the pandemic before Jassy took the helm and instituted sweeping cost-cutting across Amazon, including the biggest layoffs in its 27 years as a public company. Amazon’s workforce totaled 1.53 million employees in the second trimesterwhich represents an increase of just 5% over the previous year. In comparison, Amazon’s workforce grew by 14% to 1.52 million employees in the second quarter of 2022.
Jassy wrote in a lengthy memo to staff that Amazon is making the changes to strengthen its corporate culture and ensure it remains nimble. He underscored the point by saying that the company created a “bureaucratic mailbox,” or a dedicated email alias, to weed out any unnecessary processes or excessive rules within the company.
“We want to act like the biggest startup in the world,” Jassy wrote. “This means you have a passion for continuous innovation for customers, strong urgency (for most big opportunities, it’s a race!), high ownership, quick decision-making, disjointedness and leanness, deeply connected collaboration (you have to participate in with your teammates when devising and solving difficult problems) and a shared commitment to each other.”
Amazon shares fell in afternoon trading.
Hello team. I wanted to send a note about some changes we are making to further strengthen our culture and teams.
First, for perspective, I feel good about the progress we are making together. Stores, AWS and advertising continue to grow on very large bases, Prime Video continues to expand and new investment areas such as GenAI, Kuiper, Healthcare and several others are progressing nicely. And while we’re growing and inventing, we’re also continuing to make progress in our cost structure and operating margins, which is not easy to do. Overall, I like the direction we’re headed and appreciate the hard work and ingenuity of our teams worldwide.
When I think back on my time at Amazon, I never imagined that I would be with the company for 27 years. My plan (which my wife and I agreed on on a bar napkin in 1997) was to be here for a few years and move back to New York. Part of why I stayed was the unprecedented growth (we had $15 million in annual revenue the year before I joined – this year should be well north of $600 billion), the constant hunger for invention, the obsession with making the lives of customers easier and better every day, and the related opportunities these priorities present. But the biggest reason I’m still here is our culture. Being so customer-focused is an inspiring part of it, but it’s also the people we work with, the way we collaborate and innovate when we’re at our best, our long-term perspective, the ownership I’ve always felt at every level I’ve worked on (I started as a Level 5), the speed with which we make decisions and move, and the lack of bureaucracy and politics.
Our culture is unique and has been one of the most critical parts of our success over the first 29 years. But keeping your culture strong is not a birthright. You have to work at it all the time. When you consider the breadth of our businesses, their relative growth rates, the innovation required in each of them, and the number of people we’ve hired over the last 6-8 years to pursue those efforts, it’s quite extraordinary — and it’s going to expand even the strongest civilization. Strengthening our culture remains a top priority for the team and me. And, I think about it all the time.
We want to operate like the biggest startup in the world. This means you have a passion for constantly inventing for customers, a strong sense of urgency (for most big opportunities, it’s a race!), high ownership, quick decision-making, incoherence and leanness, deeply connected collaboration (you have to be joined at the hip with teammates when devising and solving difficult problems) and a shared commitment to one another.
Two areas that the s-team and I have been thinking about over the last few months are: 1/ do we have the right organizational structure to increase the level of ownership and speed that we desire? 2/ are we ready to invent, collaborate and be connected enough to each other (and our culture) to deliver our absolute best for customers and the business? We believe we can be better at both.
In the first issue, we have always tried to recruit highly intelligent, highly judgmental, inventive, tradition-focused, and missionary teammates. And, we’ve always wanted the people who do the actual detailed work to have high ownership. As we’ve grown our teams as quickly and substantially as we have over the past several years, understandably we’ve added a lot of managers. In this process, we have also added more layers than we had before. It creates artifacts that we would like to change (e.g. pre-meetings for pre-meetings for decision meetings, a greater range of managers who feel they need to review an issue before it moves forward, initiative owners feel less need to make recommendations because the decision will taken elsewhere, etc.). Most of the decisions we make are two-way, and as such, we want more of our teammates to feel like they can move quickly without unnecessary processes, encounters, mechanics, and levels that create overhead and waste valuable time.
Therefore, we are asking every s-team organization to increase the ratio of individual contributors to managers by at least 15% by the end of Q1 2025. Having fewer managers will remove tiers and flatten organizations more than they are today. If we do this job well, it will increase our teammates’ ability to move quickly, clarify and drive ownership, drive decision-making closer to the front lines where they most impact customers (and the business), reduce bureaucracy and strengthen our organizations’ ability to make customers’ lives better and easier every day. We will do this carefully and our PxT team will work closely with our leaders to evolve our organizations to achieve these goals in the coming months.
[By the way, I’ve created a “Bureaucracy Mailbox” for any examples any of you see where we might have bureaucracy or unnecessary process that’s crept in and we can root out…to be clear, companies need process to run effectively, and process does not equal bureaucracy, but unnecessary and excessive process or rules should be called out and extinguished. I will read these emails and action them accordingly.]
To address the second issue of how best to invent, collaborate, and be connected enough to each other and our culture to deliver the absolute best for customers and the business, we decided that we would return to the office as we were before the advent of COVID. When we look back over the past five years, we continue to believe that the advantages of being in the office together are significant. I’ve explained these benefits before (February 2023 post), but in summary, we’ve noticed that it’s easier for our teammates to learn, model, practice, and reinforce our culture. Collaboration, brainstorming and invention are simpler and more efficient. Teaching and learning from each other is more seamless. and, groups tend to connect better with each other. If anything, the past 15 months of being back in the office at least three days a week has strengthened our belief in the benefits.
Before the pandemic, not everyone was in the office five days a week, every week. If you or your child were sick, if you had some kind of emergency at home, if you were on the road seeing clients or partners, if you needed a day or two to finish coding in a more isolated environment, people worked remotely. This is understood and we will also move on. But before the pandemic, it wasn’t a given that people could work remotely two days a week, and that will also be true going forward – we expect people to be in the office outside of extenuating circumstances (such as those mentioned above) or if you have already been approved for a remote work exemption through your team leader.
We will also restore assigned office settings to locations that were previously organized this way, including our US headquarters locations (Puget Sound and Arlington). For locations that had flexible office arrangements before the pandemic, including much of Europe, we will continue to operate that way.
We understand that some of our teammates may have structured their personal lives in such a way that returning to the office consistently five days a week will require some adjustments. To ensure a smooth transition, we will activate this new expectation on January 2, 2025. Global Real Estate and Facilities (GREF) is working on a plan to accommodate the office arrangements listed above and will share the details as they are finalized.
I want to thank the leaders and support teams in advance for the work they will be doing to improve their organizational structures in the coming months. With a company of our size and complexity, the work will not be trivial and will test our collective ability to innovate and simplify in how we organize and pursue the significant opportunities we have across our businesses.
Having the right culture at Amazon is something I don’t take for granted. I continue to believe that we are all here because we want to make a difference in customers’ lives, to invent on their behalf, and to move quickly to solve their problems. I am optimistic that these changes will better help us achieve these goals while strengthening our culture and the effectiveness of our teams.
Thanks, Andy
