Amazon’s RTO mandate seen as layoff strategy

WASHINGTON, UNITED STATES — Amazon’s recent push for a full-time return-to-office (RTO) policy is a strategic move to reduce headcount without resorting to formal layoffs, according to future of work expert Nicholas Bloom.
While this tactic may succeed in controlling expenses, Bloom warns that it could “damage areas like AI where it is hard to recruit top employees”.
“Amazon presumably took the view they would rather control costs by cutting head count and take the hit of technology and innovation,” Bloom told the Business Insider.
Impact on talent acquisition and retention
Amazon’s RTO policy is in contrast with the hybrid work models favored by most tech companies. This divergence has created an opportunity for competitors to attract top talent from Amazon, particularly in critical fields like artificial intelligence.
“In particular, key AI personnel at Amazon are now being aggressively approached as the leading firms in this field — places like Google, Microsoft, and OpenAI — are all hybrid. So this is an incredible opportunity for them to hire from Amazon,” Bloom, a Stanford economist, added.
In fact, Microsoft executive Scott Guthrie reassured employees that the company has no immediate plans to change its flexible work policy, which allows most employees to work remotely. He emphasized that the company would only consider altering its current policy if productivity declined significantly.
Employee reactions and productivity concerns
Amazon employees have resisted the new policy. Some have taken to internal communication channels to express their dissatisfaction, with one employee in Germany describing the mandate as a “betrayal.” Others are “rage applying” for jobs at other companies, Fortune reported.
The RTO mandate aligns with Amazon CEO Andy Jassy’s broader cost-cutting and restructuring plan. In a recent memo, Jassy hinted at reducing management layers and increasing the ratio of individual contributors to managers by 15% by early 2025.
CEOs’ RTO push ignores evidence, expert says
Aside from Bloom, another expert observed that many CEOs who are pushing for a full return to the office are doing so based on personal beliefs rather than concrete data.
Brigid Schulte, director of the Better Life Lab and author of Over Work, pointed out that many leaders operate in a “circular echo chamber,” reinforcing their views through conversations with like-minded peers.
A KPMG US survey revealed that 83% of big-company CEOs expect full-time office returns within three years, indicating a growing sentiment among top executives. Meanwhile, a new global survey by HireRight also reported that twice as many HR leaders anticipate an increase in remote work rather than a decrease in 2024.