Amazon instructs the company's employees to spend five days a week in the office, CEO Andy Jassy wrote in a memo on Monday.
The decision represents a significant departure from Amazon's previous stance on returning to work, which required employees to be in the office at least three days a week. Now, the company is giving employees until January 2 to comply with the new policy.
Corporate employees are expected to be in the office five days a week, “except in special circumstances” or when granted an exception by their company's S-Team leader, Jassy said, referring to the close-knit group of executives who report to Amazon's CEO.
“Before the pandemic, it was not a given that people could work from home two days a week, and that will continue to be the case in the future – we expect people to be in the office outside of extenuating circumstances,” Jassy said.
Amazon also plans to simplify its corporate structure by employing fewer managers to “remove layers and flatten the organization,” Jassy said. Each S-Team organization is expected to increase the ratio of individuals to managers by at least 15% by the end of the first quarter of 2025, he said. Individuals mean employees who don't typically manage other employees.
The company rapidly built up its headcount over the course of the pandemic before Jassy took the helm and implemented sweeping cost-cutting at Amazon, including the largest layoffs in its 27 years as a public company. Amazon's headcount was 1.53 million in the second quarter, up just 5% year over year. For comparison, Amazon's workforce grew 14% to 1.52 million employees in the second quarter of 2022.
Jassy wrote in a lengthy letter to employees that Amazon is making these changes to strengthen its company culture and ensure it remains flexible. He underscored this point by saying the company has set up a “bureaucracy mailbox,” or special email alias, to weed out any unnecessary processes or redundant rules within the company.
“We want to operate like the world's greatest startup,” Jassy wrote. “That means we have a passion for constantly inventing for our customers, we have a strong drive (with most big opportunities, it's a race!), we have a lot of ownership, we make decisions quickly, we are aggressive and frugal, we collaborate closely (when we invent and solve hard problems, we have to work closely with our teammates), and we are committed to each other.”
Hi team, I wanted to share some changes we're making to further strengthen our culture and our teams.
First, perspective: I'm pleased with the progress we're making together. Stores, AWS and advertising continue to grow at a very large scale, Prime Video continues to expand, and new investment areas like GenAI, Kuiper, healthcare and several others are performing well. And as we grow and innovate, we also continue to make progress on our cost structure and operating margins, which is not easy. Overall, I like the direction we're heading and appreciate the hard work and ingenuity of our teams around the world.
When I think back to my time at Amazon, I never imagined I'd work for the company for 27 years. My plan (which my wife and I decided on a bar napkin in 1997) was to stay here for a few more years and then move back to NYC. One of the reasons I stayed was the unprecedented growth (the year before I joined, we had $15 million in annual revenue—this year, it should be well over $600 billion), the constant hunger for invention, the obsession with making customers' lives easier and better every day, and the associated opportunities those priorities provide. But the most important reason I'm still here is our culture. The customer focus 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 at (I started as a Level 5), the speed at which we make decisions and act, and the lack of bureaucracy and politics.
Our culture is unique and has been one of the most important factors in our success for the first 29 years of our existence. But maintaining a strong culture is not a birthright. It is something you have to work at constantly. When you consider the breadth of our business lines, the growth rates involved, the innovation required in each of them, and the number of people we have hired over the last 6-8 years to pursue these goals, it is quite unusual – and will test even the strongest culture. Strengthening our culture remains a top priority for the S team and me. And it is something I think about constantly.
We want to operate like the world's biggest startup. That means we're passionate about inventing for our customers, we have a strong drive (most big opportunities are a race!), we take on a lot of responsibility, we make decisions quickly, we're aggressive and frugal, we collaborate closely (inventing and solving hard problems requires you to work closely with your teammates), and we're committed to each other.
Two areas the S team and I have been thinking about over the past few months are: 1. Do we have the right organizational structure to achieve the level of ownership and speed we want? 2. Are we set up to invent, collaborate, and connect sufficiently with each other (and our culture) to deliver the absolute best for customers and the business that we can? We believe we can be better in both areas.
On the first topic: We've always tried to hire very smart, judgmental, inventive, results-oriented, and mission-driven team members. And we've always wanted the people doing the actual detail work to have a lot of ownership. As we've grown our teams so quickly and so much in recent years, we've understandably hired a lot of managers. In the process, we've also added more layers than before. This has created artifacts we'd like to change (e.g., pre-decision meetings for pre-decision meetings, a longer line of managers who feel they need to review an issue before moving forward, initiative owners who feel they need to make fewer recommendations because the decision is made elsewhere, etc.). Most of the decisions we make are two-way doors, and so we want more of our team members to feel like they can act quickly, without unnecessary processes, meetings, mechanisms, and layers that add overhead and waste valuable time.
So we're asking every S-Team organization to increase their 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 team members' ability to act quickly, clarify and strengthen their sense of accountability, bring decision-making closer to the front lines where it impacts customers (and the business) the most, reduce bureaucracy, and strengthen our organizations' ability to make customers' lives better and easier every day. We'll do this carefully, and our PxT team will work closely with our leaders to evolve our organizations and achieve 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, which is being better positioned to invent, collaborate, and be sufficiently connected to each other and our culture to deliver the absolute best for customers and the company, we have decided that we will return to the offices we had before COVID hit. Looking back over the past five years, we continue to believe that the benefits of working together in the office are significant. I've explained these benefits before (February 2023 post), but in summary, we've found that it's easier for our teammates to learn, model, practice, and reinforce our culture; collaboration, brainstorming, and invention is easier and more effective; teaching and learning from each other is smoother; and teams tend to be better connected. If anything, the past 15 months of being back in the office at least three days a week have strengthened our belief in the benefits.
Before the pandemic, not everyone was in the office five days a week. If you or your child were sick, if you had an emergency at home, if you were traveling to meet clients or partners, if you needed a day or two to complete programming in a more isolated environment, people worked from home. That was understandable and will continue to be the case going forward. But before the pandemic, it was not a given that people could work from home two days a week and that will continue to be the case going forward – we expect people to be in the office except in special circumstances (like those mentioned above) or if you've already had an exemption to work remotely approved by your S team leader.
We will also reinstate desk assignments at locations that were previously organized this way, including our U.S. headquarters (Puget Sound and Arlington). We will continue to do so at locations that had flexible desk assignments prior to the pandemic, including much of Europe.
We understand that some of our teammates have arranged their personal lives so that returning to the office five days per week will require some adjustments. To ensure a smooth transition, we will put this new expectation into effect on January 2, 2025. Global Real Estate and Facilities (GREF) is working on a plan to adjust the above desk arrangements and will share the details once they are finalized.
I want to thank our leaders and support teams in advance for the work they will be doing over the coming months to improve their organizational structures. At a company of our size and complexity, this will be no trivial task and will test our collective ability to innovate and simplify in how we organize ourselves and take advantage of the meaningful opportunities we have across all our businesses.
I don't take having the right culture at Amazon for granted. I remain convinced that we are all here because we want to make a difference in our customers' lives, invent on their behalf, and solve their problems quickly. I'm optimistic that these changes will help us achieve those goals while strengthening our culture and the effectiveness of our teams.
Thanks, Andy
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