Amazon is instructing corporate staffers to spend five days a week in the office, CEO Andy Jassy wrote in a memo on Monday.
The decision marks a significant shift from Amazon’s earlier return-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 start adhering to the new policy.
Corporate employees will be expected to be in the office five days a week “outside of extenuating circumstances” or unless they have been granted an exception by their organization’s S-team leader, Jassy said, referring to the close-knit group of executives that report to Amazon’s CEO.
“Before the pandemic, it was not a given that folks could work remotely two days a week, and that will also be true moving forward — our expectation is that people will be in the office outside of extenuating circumstances,” Jassy 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 will be expected to increase the ratio of individual contributors to managers by at least 15% by the end of the first quarter of 2025, he said. Individual contributors refers to employees who typically do not manage other staffers.
It is unclear if the change will result in the elimination of some manager positions. An Amazon spokesperson did not immediately respond to CNBC’s request for comment.
The company rapidly grew its headcount over the course of the pandemic before Jassy took the helm and instituted widespread cost cuts across Amazon, including the largest layoffs in its 27 years as a public company. Amazon’s headcount totaled 1.53 million employees in the second quarter, representing growth of just 5% from a year earlier. By comparison, Amazon’s workforce expanded 14% to 1.52 million employees in the second quarter of 2022.
Jassy wrote in a lengthy missive to staffers that Amazon is making the changes to strengthen its corporate culture and ensure that it remains nimble. He underscored the point by saying the company created a “bureaucracy mailbox,” or dedicated email alias, to root out any unnecessary processes or excessive rules within the company.
“We want to operate like the world’s largest startup,” Jassy wrote. “That means having a passion for constantly inventing for customers, strong urgency (for most big opportunities, it’s a race!), high ownership, fast decision-making, scrappiness and frugality, deeply-connected collaboration (you need to be joined at the hip with your teammates when inventing and solving hard problems), and a shared commitment to each other.”
Amazon shares ticked lower in afternoon trading.
Hey team. I wanted to send a note on a couple changes we’re making to further strengthen our culture and teams.
First, for perspective, I feel good about the progress we’re making together. Stores, AWS, and Advertising continue to grow on very large bases, Prime Video continues to expand, and new investment areas like GenAI, Kuiper, Healthcare, and several others are evolving nicely. And at the same time we’re growing and inventing, we’re also continuing to make progress on our cost structure and operating margins, which isn’t easy to do. Overall, I like the direction in which we’re heading and appreciate the hard work and ingenuity of our teams globally.
When I think about my time at Amazon, I never imagined I’d be at the company for 27 years. My plan (which my wife and I agreed to on a bar napkin in 1997) was to be here a few years and move back to NYC. Part of why I’ve stayed has been the unprecedented growth (we had $15M of annual revenue the year before I joined—this year should be well north of $600B), the perpetual hunger to invent, the obsession with making customers’ lives easier and better every day, and the associated 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 invent when we’re at our best, our long-term perspective, the ownership I’ve always felt at every level I’ve worked (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 in our 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 associated growth rates, the innovation required across each of them, and the number of people we’ve hired the last 6-8 years to pursue these endeavors, it’s pretty unusual—and will stretch even the strongest of cultures. Strengthening our culture remains a top priority for the s-team and me. And, I think about it all the time.
We want to operate like the world’s largest startup. That means having a passion for constantly inventing for customers, strong urgency (for most big opportunities, it’s a race!), high ownership, fast decision-making, scrappiness and frugality, deeply-connected collaboration (you need to be joined at the hip with your teammates when inventing and solving hard problems), and a shared commitment to each other.
Two areas that the s-team and I have been thinking about the last several months are: 1/ do we have the right org structure to drive the level of ownership and speed we desire? 2/ are we set up to invent, collaborate, and be connected enough to each other (and our culture) to deliver the absolute best for customers and the business that we can? We think we can be better on both.
On the first topic, we’ve always sought to hire very smart, high judgment, inventive, delivery-focused, and missionary teammates. And, we have always wanted the people doing the actual detailed work to have high ownership. As we have grown our teams as quickly and substantially as we have the last many years, we have understandably added a lot of managers. In that process, we have also added more layers than we had before. It’s created artifacts that we’d like to change (e.g., pre-meetings for the pre-meetings for the decision meetings, a longer line of managers feeling like they need to review a topic before it moves forward, owners of initiatives feeling less like they should make recommendations because the decision will be made elsewhere, etc.). Most decisions we make are two-way doors, and as such, we want more of our teammates feeling like they can move fast without unnecessary processes, meetings, mechanisms, and layers that create overhead and waste valuable time.
So, we’re asking each 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 layers and flatten organizations more than they are today. If we do this work well, it will increase our teammates’ ability to move fast, clarify and invigorate their sense of ownership, drive decision-making closer to the front lines where it most impacts customers (and the business), decrease bureaucracy, and strengthen our organizations’ ability to make customers’ lives better and easier every day. We will do this thoughtfully, and our PxT team will work closely with our leaders to evolve our organizations to accomplish these goals over the next few 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 being better set up to invent, collaborate, and be connected enough to each other and our culture to deliver the absolute best for customers and the business, we’ve decided that we’re going to return to being in the office the way we were before the onset of COVID. When we look back over the last five years, we continue to believe that the advantages of being together in the office are significant. I’ve previously explained these benefits (February 2023 post), but in summary, we’ve observed that it’s easier for our teammates to learn, model, practice, and strengthen our culture; collaborating, brainstorming, and inventing are simpler and more effective; teaching and learning from one another are more seamless; and, teams tend to be better connected to one another. If anything, the last 15 months we’ve been back in the office at least three days a week has strengthened our conviction about the benefits.
Before the pandemic, not everybody was in the office five days a week, every week. If you or your child were sick, if you had some sort of house emergency, if you were on the road seeing customers or partners, if you needed a day or two to finish coding in a more isolated environment, people worked remotely. This was understood, and will be moving forward as well. But, before the pandemic, it was not a given that folks could work remotely two days a week, and that will also be true moving forward—our expectation is that people will be in the office outside of extenuating circumstances (like the ones mentioned above) or if you already have a Remote Work Exception approved through your s-team leader.
We are also going to bring back assigned desk arrangements in locations that were previously organized that way, including the U.S. headquarters locations (Puget Sound and Arlington). For locations that had agile desk arrangements before the pandemic, including much of Europe, we will continue to operate that way.
We understand that some of our teammates may have set up their personal lives in such a way that returning to the office consistently five days per week will require some adjustments. To help ensure a smooth transition, we’re going to make this new expectation active on January 2, 2025. Global Real Estate and Facilities (GREF) is working on a plan to accommodate desk arrangements mentioned above and will communicate the details as they are finalized.
I want to thank our leaders and support teams in advance for the work they will do to improve their org structures over the coming months. With a company of our size and complexity, the work won’t be trivial and it will test our collective ability to invent and simplify when it comes to how we organize and go after the meaningful opportunities we have across all of 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, invent on their behalf, and move quickly to solve their problems. I’m optimistic that these changes will better help us accomplish these goals while strengthening our culture and the effectiveness of our teams.
Thanks, Andy