Following numerous layoffs within the tech sector, it would seem that Amazon and its employees are not out of the woods yet.
Amazon previously announced last month that the company would be cutting nearly 20,000 jobs due to waning profits following its peak during the Covid-19 pandemic. Unfortunately, Amazon’s struggles continue and now remaining employees are expecting to see significant pay cuts moving forward this year.
Amazon has a unique form of compensation for its corporate employees in which the company provides a significantly lower base pay when compared to its competitors but makes up the difference through various stock awards. The idea behind this model is to get employees to consider the overall growth of the company and “think like owners” and has proven to be very lucrative for employees with a “long-term view” stated a spokeswoman for the company.
The issue presents itself when there are periods of decline within the company. Amazon and numerous tech companies saw significant growth over the past couple of years as consumers turned to the digital realm for entertainment, shopping, and more. Now that the general public has shifted back towards more traditional means of spending Amazon’s profits and stock prices have slipped. As a result, Amazon corporate employees are expecting to see a reduction in their pay between 15% and 50% for the year of 2023.
Source: Financial Times