Amazon CEO Andy Jassy criticizes manager fiefdoms and stresses the need for 'meritocracy' in a leaked recording
- Amazon CEO Andy Jassy wants to reduce management layers and bureaucracy.
- He told employees that building a giant team and fiefdom wouldn't help them get promoted.
- He also encouraged staff to act like owners and stay aware of industry competition.
During a recent internal all-hands meeting, Jassy reiterated his commitment to de-layering, a move he thinks will cut bureaucracy. Amazon previously announced a plan to increase the ratio of individual contributors to managers by 15% by the end of March.
At the Tuesday meeting, the CEO said Amazon is actively changing how it thinks about promotions. He stressed the best leaders are those who "get the most done with the least amount of resources required to do the job," according to a recording of the meeting obtained by Business Insider.
Jassy added that "every new project shouldn't take 50 or more people to do it," and reminded employees that some of AWS's most successful products initially started with teams of about a dozen.
"The way to get ahead at Amazon is not to go accumulate a giant team and fiefdom," Jassy said. "There's no award for having a big team. We want to be scrappy about us to do a lot more things."
Jassy's comments were in response to a question about his intention to run Amazon like "the world's largest startup." In addition to the manager shake-up, Jassy underscored the need to build a culture of speed and meritocracy.
Amazon hasn't shared how exactly it is reducing management layers. Some managers were told to increase their number of direct reports, make fewer senior hires, and cut pay for certain employees, BI previously reported.
In an email to BI, an Amazon spokesperson said the company has now completed this process, which impacted a "relatively small subset of employees." The spokesperson added that Amazon combined teams and moved managers to individual contributor roles to reach its goal, and this "did not equate to eliminating 15% of manager roles."
"In September 2024, we shared with employees that we set a goal to increase the ratio of individual contributors to managers by 15% across our organizations because it was the right time to bring us closer to customers and reinforce our culture of ownership. There are a number of ways to achieve that increase. We've now reached that goal, which we believe will allow our teams to move even faster as they innovate for customers," the spokesperson said.
Meritocracy over bureaucracy
In September, Amazon also created a "No Bureaucracy" email alias, where employees could report unnecessary processes that needed to be fixed.
Jassy said during the Tuesday meeting that he's read every single one of the over a thousand emails he's received so far and that the company has made more than 375 changes as a result.
"We are, as a team, committed to getting rid of the bureaucracy," Jassy said.
When companies grow, it's natural to put more processes in place, Jassy added. But companies often make the mistake of focusing too much on adding more people and managing them versus improving the customer experience, he said.
"It's not how charismatic you are. It's not whether you're really good at managing up or managing sideways," he said. "What matters is what we actually get done for customers. That is what we reward. It's a meritocracy."
'It is your company'
Jassy also urged employees to "move fast and act like owners."
He said big companies tend to become slow and indecisive. This is a particularly big risk for Amazon, given the intense competition it faces. Competitors include the "most technically able, most hungry" companies in the world, including startups "working seven days a week, 15 hours a day," he said.
"One of the strengths of Amazon over the first 29 years is that we've hired really smart, motivated, inventive, ambitious people who have been great owners," Jassy said. "What would I do if this was my company? And by the way, it is your company. This is all of our company."
Another point Jassy made during the meeting was to be "hyper-aware" of what's going around Amazon. That means keeping track of not just Amazon's own goals, but other technology and companies that can be inspiring, he said.
"Great companies, startups who have that real missionary zeal and succeed are always looking around," Jassy said. "When you're inventing, you need that blind faith that you're building something maybe others haven't thought of, but you got to keep checking in to make sure it's the best solution available for people."
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