Andy Jassy’s long game: Amazon’s reinvention enters its 5th phase as AI upends the workforce

Andy Jassy’s latest memo makes it official: AI will reshape and reduce Amazon’s corporate workforce. But this is more than another cost-cutting move. It’s a new phase in a multi-year effort to remake the company from the inside out.

The process began when Jassy took over Amazon founder Jeff Bezos’ empire nearly four years ago. The leadership transition quickly became a course correction. Now, the Amazon CEO is attempting a full-scale reinvention.

Here’s how Amazon’s approach under Jassy has evolved.

Phase 1: The Reassessment (2021)

Jassy becomes Amazon CEO in July 2021, at the peak of the pandemic-era boom. The company soon realizes it has overbuilt. But rather than making sweeping changes, Jassy spends much of his first year observing — decentralizing decisions on remote work, assessing operations, and preparing for tougher decisions ahead.

Phase 2: The Reckoning (2022)

Amazon hits the brakes. Amid slowing growth and rising costs, Jassy announces the company’s first major layoffs. Products, projects and experiments are cut. Rapid expansion is replaced by focus and discipline. Jassy signals a narrowing of priorities, while protecting long-term bets like Amazon Web Services, Prime, and logistics.

Phase 3: The Resistance (2023)

Layoffs continue, eventually totaling 27,000 corporate roles. The company mandates a three-day return to office, sparking backlash from employees. Jassy calls the return essential to rebuilding Amazon’s culture of innovation. Amazon tries to reassert control and revive collaboration after years of remote work and rapid growth.

Phase 4: The Reset (2024)

Jassy points to creeping bureaucracy and sluggish decision-making as barriers to innovation, looking to return the company to its roots. A new mandate calls for a 15% reduction in managers and sets the stage for a full return to the office, five days a week. A “Bureaucracy Mailbox” invites employees to flag red tape.

Phase 5: The Reinvention (2025)

In his latest memo to employees, Jassy acknowledges that the company will “need fewer people doing some of the jobs that are being done today,” as AI agents take on more tasks. While some new roles will emerge, he says, Amazon expects its total corporate headcount to decline in the years ahead.

No specific layoffs were announced in conjunction with the memo. Amazon’s corporate workforce numbered around 350,000 in early 2023. Its total employee base, including warehouse workers, is more than 1.5 million people.

Jassy calls on Amazon employees to “figure out how to invent for our customers more quickly and expansively, and how to get more done with scrappier teams.”

And he’s clear about what it will mean to work at Amazon in the years ahead: “Those who embrace this change, become conversant in AI, help us build and improve our AI capabilities internally and deliver for customers, will be well-positioned to have high impact and help us reinvent the company.”

What happens next — and whether it actually works — remains to be seen. But what started as a basic system patch has become a full reconfiguration of the Amazon machine, with new default settings: smaller, faster, and automated.