Amazon has already implemented two waves of layoffs across the organisation, but cost-cutting measures still need to be implemented. The world’s largest online retailer has declared plans to scale back employee stock awards as part of its remuneration structure.
Approximately 100 employees from Amazon’s video games company had recently been let go, according to a memo from Christoph Hartmann, vice president of Amazon Games. Employees from Amazon’s San Diego gaming studio and Prime Gaming, a service targeted at members of Amazon’s primary loyalty programme, were among those laid off as part of an organisational restructure.
Hartmann asserted that certain employees had been transferred to other projects that align with Amazon’s strategy emphasis in the memo cited by CNBC. There is never a comfortable way to share this kind of news, according to Hartmann. Additionally, he promised to treat affected workers with “empathy and respect” and to offer them severance money, health insurance benefits, outplacement services, and paid time off to complete their job search.
Weeks after announcing another round of significant job losses at a time when the global economy is experiencing a slump, Amazon has decided to reduce employee stock awards. The business had previously stated that the employment reduction would last until 2024.
In the first quarter of 2019, Amazon will reassess the 2025 compensation in order to “plan for stock variation”. Given the two-year award cycle that begins the next year, the “final outlook year” is 2025, according to the report. The message also alluded to a change in Amazon’s pay structure that would increase employee remuneration and perhaps offset any decline in the company’s stock price. According to a Reuters article, the corporation has chosen to reduce RSU (restricted stock unit) rewards for the last outlook year by a little amount, but not for previous years. The adjustments are a component of its plan for navigating a shaky economy.
The price of Amazon stock is currently hovering around the same levels as it did in 2018 and 2020. According to the study, some employees have expressed dissatisfaction with the value of their RSU-based remuneration due to the lack of stock appreciation. Any action to improve the cash component of employee compensation could allay such worries. A spokeswoman for Amazon stated that the pay structure change is merely an option and not a set course of action, adding that the company’s compensation philosophy “remains unchanged”.
This announcement comes just after Amazon revealed a second round of huge layoffs, which added to the recent wave of job losses affecting the technology sector as a result of the recession. In the first round, Amazon made the decision to fire 18,000 workers, and in the second round, made the decision to lay off 9,000 workers in March. According to reports, Amazon is thinking about changing its compensation structure in the future to be more evenly distributed between base cash pay and equity.
Despite the layoffs and the shaky economy, Amazon’s shares have increased by over 20% this year after falling by about 50% in 2022. Almost all of the leading corporations in the sector have been affected by tech layoffs. Alphabet, the parent company of Google, made the decision to cut 12,000 jobs earlier this year. In its first round of layoffs, Meta slashed 11,000 workers, and in its second, 10,000. A competitor to Amazon just announced 2,000 job cutbacks, and Twitter eliminated more than half of its staff in the second half of 2012.
