Amazon’s corporate workers may experience a decrease in their pay due to a long period of decline in the company’s stock prices, as reported by Bloomberg. The company has also retracted job offers made to some accepted candidates.
Reportedly, Amazon’s shares suffered a decline of over 35 per cent in 2022 due to unfavourable macroeconomic conditions, which has resulted in employee pay for 2023 being between 15 per cent and 50 per cent lower than the expected targets set by Amazon.
Amazon usually provides lower base-pay salaries to its employees compared to its competitors, but compensates them through stock vesting. Additionally, their compensation becomes increasingly reliant on stock awards the longer they remain with Amazon, with stocks accounting for 50 per cent or more of their total income in some cases.
The company also provides restricted stock units (RSUs) to certain employees, typically those in higher positions, as a way of encouraging them to remain with the company for an extended period. The value of the stocks is linked to the company’s overall performance as well as specific departments. This approach motivates employees to work as if they have a stake in the company.
However, if the report is to be believed, Amazon’s HR department has provided training documents to managers to help them deal with the pay decrease. Additionally, managers have been requested to hold on to employees until the stock prices recover.
The report goes on to state that individuals familiar with the situation have disclosed that between 2017 and early 2022, the stock price had increased by approximately 30% annually on average. However, Amazon’s stock is currently trading at about $96 per share (approximately Rs 7,950), and some employees’ pay packages were structured with the assumption that Amazon’s shares would be around $170 (approximately Rs 14,000) per share.
During an all-hands meeting at Amazon’s Seattle headquarters, CEO Andy Jassy reportedly addressed the pay reduction issue. Jassy acknowledged that the market was in a challenging situation and that Amazon had already made a difficult decision such as laying off 18,000 employees. He acknowledged that compensation was being affected, but remained optimistic about the company’s prospects and its ability to emerge from this period in a stronger position.
Recently, Amazon announced that employees would be required to work at the office for at least three days each week beginning in May.
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