Amazon Orders Full Return to Office

The Briefing By Martin Peers

Typically, CEO letters to staff are filled with jargon and little substance. However, Amazon CEO Andy Jassy’s recent letter titled “Strengthening Our Culture and Teams” breaks that mold. In it, Jassy candidly addresses the challenges facing Amazon, notably its evolution into a cumbersome bureaucracy, marked by an excess of managers and inefficient processes.

One of his pointed criticisms highlights the absurdity of having “pre-meetings for the pre-meetings for the decision meetings.” To combat this bureaucratic culture, Jassy plans to reduce managerial layers and flatten organizational structures. He’s even introduced a “bureaucracy mailbox” for employees to report instances of unnecessary processes.

Additionally, Jassy has mandated a return to five-day in-office work weeks, a move that garnered significant media attention. However, the true significance of his letter lies in the broader message: Amazon's current organizational structure is impeding its speed and ability to deliver optimal customer service. This aligns with founder Jeff Bezos’ 2016 warning about the dangers of entering a “Day 2” phase, characterized by stagnation, which can lead to decline.

Jassy's letter suggests he holds Bezos' management style partly accountable for the current state, referencing the substantial hiring over the past 6-8 years—dating back to Bezos’ original analysis. Since stepping into the CEO role, Jassy has focused on cutting staff, trimming costs, and sharpening Amazon's strategic focus, even eliminating some less profitable ventures. His recent letter indicates he is not finished with these changes.

Apple’s Impatient Investors
Investors sometimes seem oblivious to the bigger picture. This was evident when Apple shares fell nearly 3% on Monday following reports that pre-orders for the high-end iPhone 16 Pro and Pro Max series were lower than last year’s. Given the minimal hardware upgrades revealed during last Monday’s iPhone launch, this dip should not have been surprising.

The real enhancements for this year are the AI features Apple plans to roll out over the coming months, which will primarily benefit the 15 Pro series and newer models. While this should drive upgrades, it may do so over a longer timeframe than usual.

This sentiment has been clear since early June when Apple announced its AI features. Following that news, Apple shares rose by 15% before the recent sell-off. In the long run, Apple’s AI innovations are expected to gain traction, but investors will need to exercise patience.