Amazon and Samsung gear up for major workforce restructuring to boost efficiency amid market pressures

Amazon and Samsung are both making significant moves to streamline their operations, with each tech giant aiming to reduce management layers and cut costs. The changes come as both companies face increased pressure to remain competitive in evolving markets.

Amazon is preparing for a large-scale managerial restructuring as CEO Andy Jassy pushes to streamline the company’s hierarchy. Jassy recently announced plans to increase the ratio of individual contributors to managers by at least 15% by the first quarter of 2025. The goal is to remove unnecessary organisational layers, making the company more agile and efficient. This shift could lead to the elimination of approximately 13,834 manager roles, saving the company between $2.1 billion and $3.6 billion annually, according to a Morgan Stanley report.

Morgan Stanley estimates that 7% of Amazon’s workforce holds managerial positions. By reducing the number of managers from 105,770 to 91,936, the company could see cost savings that would account for 3% to 5% of its projected operating profit for 2025. Amazon, which employs over 1.5 million people worldwide, told Business Insider that it had added a significant number of managers in recent years and that this restructuring is aimed at improving efficiency and strengthening its culture.

Jassy shared that reducing management layers will allow Amazon to "move faster without bureaucratic hurdles." However, Amazon has not confirmed the exact number of layoffs or provided specific details about the changes.

Meanwhile, Samsung is undergoing its own workforce reductions, primarily in overseas markets. The South Korean tech giant is laying off around 10% of its workforce in Southeast Asia, Australia, and New Zealand, with additional cuts planned in other markets, according to a Bloomberg report. The layoffs are expected to impact roughly 10% of staff in certain subsidiaries, although the exact numbers will vary based on regional factors.

Samsung has around 147,000 employees abroad, making up more than half of its 267,800 total workforce. The company has avoided layoffs in its home market of South Korea, focusing instead on reducing management and support roles overseas. These cuts are part of a broader effort to improve operational efficiency, according to a company spokesperson.

Samsung’s struggles in key markets, particularly in the memory chip and smartphone sectors, have led to a 20% drop in its stock value this year. The company has fallen behind rivals like SK Hynix in producing AI-related memory chips and has faced challenges in competing with Taiwan Semiconductor Manufacturing Co. for custom chip production. Samsung recently appointed Jun Young-hyun as the new head of its chip business, who warned that the company must change its workplace culture to avoid a “vicious cycle.”

The company has a history of workforce reductions during tough market cycles and recently cut about 10% of its jobs in India and parts of Latin America. In this latest round, Samsung is expected to cut less than 10% of its overseas staff while preserving manufacturing jobs.