Hey Team, It's Day 2

Amazon CEO Signals More Staff Cuts, Tighter Work Controls

Since leaving Amazon last year, I've been chronicling the company's continued descent from its position as a market-leading online retailer and technology company to a cash-obsessed profit foundry willing to melt anything that will increase its profits.

My bias is clear. But it doesn't make me wrong. A company I once admired for its principled boldness and "work smarter" ethos seems bent on continuing its post-pandemic transformation into a GE-style finance company whose propagandists outnumber its leaders.

Yesterday, CEO Andy Jassy announced a new wave of layoffs. The fact he didn't use the word "layoffs" doesn't change the meaning of the lengthy email he sent to company employees explaining a fresh round of flagrantly unpopular and alienating policy changes.

Let's briefly summarize what Jassy said, then what I contend he meant. Then I will ask some questions that have no chance of being answered unless and until Amazon's shareholders wake up and start holding their clearly wayward CEO to account for riding the company into the ground.

For an entertaining flourish, we'll close with some choice reactions from employees, who are livid about the missive and making no bones about it.

What Andy Jassy Says

Summarizing, the CEO's message claims:

1. He wants to rejuvenate Amazon's company culture and founding spirit.

2. To do this, he wants to foster better cohesion and collaboration by mandating every salaried employee work full time in an office. No more working from home. No more hybrid work. No more working from another country. Everyone in a physical office all the time, just as it was before the pandemic.

3. He wants Amazon to be less bureaucratic.

4. To achieve this, at least 1 in every 6 managers will lose their jobs. This, Jassy says, will reduce the thickness of middle management. Interestingly, this makes his senior managers complicit in a vague diagnosis of duplication and redundancy. Which I can tell you comes as a shock to the countless among them who have been begging for the latitude and agency to reduce duplication and streamline the business.

What Andy Jassy's Email Means

To say what it says, I will say what I think it doesn't say. This will mean calling into question Jassy's and Amazon's honesty. There is ample foundation to do so.

• Jassy is not concerned with Amazon's culture. If that were the case, he would be addressing his concerns collaboratively. His email would contain examples of the cultural maladies he's observing. Culture is about ingraining behaviors until they are habitual. Ingraining habits requires human action. Reducing management staff by 15% will reduce the company's ability to ingrain behaviors and build a culture. If Jassy feels Amazon has a culture problem, then he either developed this opinion in the past five months or knowingly omitted it from his April letter to shareholders, where he would have had a duty to disclose it. This snip is the only mention of culture in that letter, and doesn't disclaim an issue in need of remediation.

• Jassy is not concerned with "the Amazon way" of doing things. Were that the case, he would use this moment to model the traditional Amazon way. Gather data. Ask questions. Talk to the people who do the work. Consult the customer. Then make an evidence-driven decision and explain why it is necessary, paying respect to anticipated counter-arguments. There is no evidence bringing people back into the office will do what Jassy says it will do. In fact, studies all say pretty much the opposite. His email provides zero evidence. It doesn't explain. It discusses feelings and theories which are debatable, but which I know from insiders have not been debated. Autocracy is not the tradition of Amazon. But when senior leaders are excluded from deliberations on decisions impacting their teams, autocracy is the prevailing culture.

• Jassy is not bringing people back into the office to engender innovation and collaboration. He's not doing it to help teams function better. If that were the case, he would allow directors to assess the needs of their team and decide working arrangements which best suit their objectives while aligning to Amazon's culture. Many directors are privately furious at the policy change, which will result in them losing strong performers who can't or won't come to the office five days per week. Psychological safety will once again be ravaged by downsizing. Their teams will be weakened and disrupted and their jobs harder. Amazon insists on senior leader leaders materially supporting their teams, but Jassy is doing the opposite here.

• Jassy is not trying to make Amazon less bureaucratic. Were that the case, he would refrain from standardizing the working arrangements of employees across a massive global network of more than 1.5 million people. There are few things more bureaucratic than standardization for its own sake, especially when it will hurt many teams more than it helps.

What this message really says is that after laying off 27,000 people, Amazon intends to lay off more. To reduce the number of people it needs to lay off, it is enacting a policy it knows will be deeply unpopular. This will trigger a voluntary exodus.

Indeed, there is already noise of a "quiet quitting" revolt. The strategy is working. To the extent it works and people leave voluntarily, Amazon can pay less severance. It can minimize negative PR. It can mitigate any concern among shareholders.

By hanging the Sword of Damocles over the manager population, Amazon can coerce more discretionary effort from people worried about losing their jobs. Some will quit, which will make things easier.

Finally, and 180 degrees contrary to what his email says, Jassy clearly wants a more bureaucratic Amazon. One with global standardization of work practices, one governed from the top by centralized and authoritarian policies which are not open to debate. One which insists upon conformity, uniformity, and compliance. And one which insists on maximum efficiency, and therefore wants to employ as few people as possible and pay them as little as it can get away with.

These characteristics of long-toothed bureaucracies are woven together by one red thread, and that's the red tape of excess rules and constraints. So imagine the dark irony that every time Jassy messages Amazonians, he does it to impose more and more .

Questions for Andy Jassy

There is zero chance these will be answered, of course. I have stopped sending my questions to Amazon's PR team after a former PR leader in the company assured me that no one will ever respond. Not to me, not to a major publication, not to a US legislator or regulator. Not to anyone without a subpoena.

But I will ask these questions anyway.

I do so on the chance that among its major investors and influential shareholders, there are still individuals with conscience and sensibility who might want to consider whether their money is well-placed with a company whose soul is apparently dead, and whose body will follow absent revival and reform.

Because if there is one thing Andy Jassy's email makes clear, it's that Amazon is firmly into Day 2 territory, and therefore on the path to its corporate grave.

1. What will Amazon stop doing? Jassy's email says the ratio of managers to individual contributors will be reduced by at least 15% between now and early '25. It doesn't say what workload will be removed to facilitate the reduction in management staff. Given that Amazon's managers are stretched to and beyond the limits of their bandwidth as things stand, chopping 15% of them away will further stretch those who remain unless something comes off the plate. This is another example of not doing things the Amazon way. Focusing on the output headcount it wants to achieve is the inverse of analyzing what Amazon wants managers to deliver, and then insisting on the right headcount to achieve that workload. By publishing a headcount reduction, Jassy gives himself a cost savings he can brag about to shareholders. But reducing headcount while maintaining or increasing workload is irresponsible. It lacks empathy. It's reckless. When the wheels come off due to lack of cover, the resulting stress will drive people into hospitals. These same discussion points were popularized in early '23 when management staffs in warehouses were chopped without reducing workload. In the time since, a lot of great talent has left the company. And I challenge you to find someone who thinks the experience of working in those warehouses, at any level, has been improved by squeezing staffs.

2. Why do you need an anti-bureaucracy hotline? In his email, Jassy gives employees an inbox where they can send messages to complain about bureaucratic practices. Why not just listen to your directors? Why not just read what your employees are already saying? Why be opaque or non-responsive when questions about bureaucratic practices are raised? This feels disingenuous. There are few things more bureaucratic than a hotline to send complaints about the bureaucracy. It's a poor proxy for pushing authority down the spine of the company and allowing directors and GMs to provide the right working environment. It's an even worse proxy for asking your directors and GMs for assessments and then trusting what they tell you.

3. What happens to people hired on remote work contracts? There are many Amazon employees who signed contracts saying they could work remotely. Some of them don't live anywhere near any office, much less whatever office Amazon decides to specify they return to. They've built their lives around the assurance of working remotely. Amazon allowed them to rely on the reasonable assurances expressed in their contracts. Now that they've changed position in reliance on those assurances, "World's Best Employer" has developed a fresh whimsy and yanked the rug from underneath them. In a properly functioning labor market, this wouldn't be permitted. Then again, it wouldn't be necessary. The sad truth is that America's norm of "at will" employment means that an employee can be terminated for any reason or no reason at all, provided the employer doesn't discriminate based on a protected characteristic. Remote work is not protected. So the answer to my question is that people hired to work remotely will be fired if they don't quit first. Amazon should say this explicitly instead of eliding to avoid the public and reputational discredit of running a dishonorable and unethical bait-and-switch operation which will victimize thousands of workers. This is Enron-level chicanery.

One of the most reliable characteristics of a bureaucracy is its impersonality. Executives keep their distance from those at the coal face. They lose touch with the way people feel and think in their organization.

Jassy's email carries the pretense of connection and affability. He takes time to contextualize his message. But the substance of his message means only one of two things can be true. Either my theory that this is designed to spark alienation is correct, or Andy Jassy has no Earthly idea of the prevailing sentiment among his workforce.

This email has really pissed people off. Here's a selection of choice comments from a Reddit thread reacting to the email, made by people purporting to be Amazon employees.

“Let people work from home, you don't need the stock to be above $200 all the time."

"'You know, I think everybody should return to the office', said the guy, sitting on a couch, on his yacht, floating around the Mediterranean."

"Everybody clap, large companies have figured out a way to do layoffs without calling it that or having to deal with legal/financial consequences."

"These RTO mandates are usually a way to get employees to quit so they don’t have to pay severance. Jassy’s one of those managers who thinks he’s a hero because he makes the tough decision to fire people… tough for everyone but him."

"The high performers will be plenty able to get a remote job or hybrid job and just do that. Then Amazon will consist of only incompetent managers and the worst performing engineers. Honestly sounds like a nightmare to work at, even more so than now."

"Amazon, namely AWS has a problem on its hand. They need to cut staff and spending because their numbers are way overinflated. If you want to see what's coming, look into all the start ups Amazon has been buying them requiring them to use AWS as their cloud provider. Let me say that again. Amazon is spending money to buy companies who are then spending that same $$ to use Amazon products..... This is called inflating stock value by showcasing an illusion of new business when they're just paying themselves. Or in other terms, fraud."

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These comments are similar in tone and substance to what I've heard from dozens of insiders. They're all angry, albeit for a variety of reasons. And they're all confused. Of everything Jassy could be doing, this is where is he choosing to place his focus. And it makes no sense to anyone.

This is the problem with making weird decisions and being opaque about why. People will speculate. Uncertainty will grow. Anxiety along with it.

One thing clear to me is that this is not about what's better for Amazon's day-to-day operations. If that were the goal, the company would consign issues like these to its talented senior leaders and empower them to make the right decisions, then audit the results.

There is something else behind it all. But if nothing else, we can understand it according to the behavior of bureaucracies, which will always act to protect themselves.

This is all about a once great company which has become a bureaucracy and is now protecting itself without saying exactly how or why. Behaving dishonestly is just what bureaucracies do, so this is further confirmation that Amazon is well into Day 2.

Tony is a writer with expertise in organizational leadership. He is a veteran senior leader in Amazon's operations network.