Simplify yourself, Amazon.
This is a message from Andy Jassy to Amazon employees on Wednesday, pointing to a shift in mindset that will have a profound impact on the future of the company.
The CEO’s email makes headlines to officially quantify Amazon’s layoffs, which, as Jassy put it, “because one of our teammates leaked this information to the outside world,” the company said. Wednesday afternoon news a few days or weeks earlier than planned.
- The 18,000 layoffs are the largest in Amazon’s history and the largest raw number of any technology company in the past year.
- The layoffs represent about 5% of Amazon’s corporate workforce, or about 350,000. The company’s total workforce of 1.5 million includes warehouse workers who are not part of these cuts.
- 18,000 is more than the previous 10,000 reportalthough Amazon leaders claim there aren’t more than before, schedulebecause you weren’t targeting a specific number.
This last point speaks to Amazon’s unique administrative structure. This management structure has fueled Amazon’s growth, but may have proven at odds with corporate curtailment best practices. More on this later.
But the message for those remaining is clear. All the Amazon days are over.
“We often talk about our leadership principles of invention and simplicity in the context of creating new products and features,” Jassy wrote, adding, “In every business we pursue, , I assure you there will continue to be a lot of this.”
However, Amazon’s CEO wrote: Find ways to do more for your customers at lower costs (passing savings on to them in the process). ”
“Both these types of Invent and Simplify are really important,” he explained.
Jassy is not Thoreau. But the underlying feeling is the same. As the philosopher wrote, “Life is obsessed with details. Simple, simple, simple!”
So what does this actually mean for Amazon?
Previews have appeared in the past few months as the company downsized and eliminated its products, services and entire business. Scout neighborhood delivery robot, Amazon Care primary healthcare business, his brick-and-mortar Amazon bookstore, and more.
Discussing the job cuts in a recent memo, Jassy wrote that the company’s annual business review this year “has become more challenging given the uncertain economy and rapid hiring over the past few years.” I’m here.
In an earlier note in November, Jassy listed some of the businesses Amazon will continue to focus on. Amazon Web Services; Prime Video; Alexa; Project Kuiper (satellite internet); Zoox (robo-taxis);
Former Amazon executive John Rothman, who has written several books about the company, advocated going further with a “zero-based” approach in which all Amazon initiatives and projects are justified from scratch. I’m here.
No matter how far the reset goes, it’s clear that Amazon needs to be more selective in its pursuit of the elusive fourth pillar of its business.
A litmus test to watch: the “Highlights” section of Amazon’s earnings report. This summary has reached epic proportions in recent years, exceeding 2,300 words in his four sections and 39 bullet points for the third quarter of 2022. That’s more than three times as long as he did ten years ago.
The company’s sprawl was partially driven by the independence Amazon gave to its business leaders, known internally as “single-threaded leadership.”
In this approach, “one person, unencumbered by competing responsibilities, owns a single primary initiative and leads a separable and mostly autonomous team to achieve its goals,” said a former Amazon executive. As Colin Bryar and Bill Carr write in their 2021 book, “Work backwards.”
This autonomy is why it was previously so difficult to determine the number of job cuts.
Amazon says it has not set broad reduction targets. Instead, Jassy writes:
Single-threaded leadership is a big part of what makes Amazon what it is today. But a slow rollout of layoffs can create a paralyzing sense of dread across the workforce as questions about who and what will survive last for weeks or months. This is why the corporate cost-cutter mantra is “cut once, cut deep, and get it done.”
This is just one of the ways Amazon’s past approach may not align with the new reality.
