Amid cuts reportedly affecting some 10,000 jobs, Amazon is said to be offering voluntary buyouts or “voluntary severance payments” to some employees.
CNBC reports that reported Wednesday that Amazon offered voluntary segregation and compensation packages to some business sectors on Tuesday and Wednesday, according to company reports.
This week, the company also conducted layoffs, Amazon confirmed, but did not comment on the number of employees being laid off.
“As we’ve been going through this, given the current macroeconomic environment (and several years of rapid hiring), some teams are making adjustments, which in some cases means certain features are no longer needed,” said Amazon spokesperson Kelly Nantel. told CNN about the confirmed layoffs.
“We do not take these decisions lightly and we are working to support all employees who may be affected,” she added.
The company did not immediately respond to a request for comment on the reports of voluntary buyouts.
According to CNBC, Amazon is offering employees severance pay equal to three months’ wages. It includes one week’s pay for every six months the employee works with the company and a weekly stipend for three months, theoretically to pay for maintaining their health insurance. Employees will have access to the business plan until the end of next month, the outlet added.
The offers give employees until November 29 to decide to leave, and they can reverse that decision until December 5. If they do the buyout, their last day will be December 23.
Amazon’s moves this week come amid a wider labor crisis in the technology sector, which has seen historic layoffs in recent months. Earlier this month, for example, Meta laid off some 11,000 employees, the first time in its history that it carried out large-scale layoffs. Both companies had to deal with disappointing earnings figures this year. Amazon’s stock is down 44% compared to the start of the year, and Meta’s is down about 67%.
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When companies need to cut spending in a challenging economic environment, voluntary agreements like Amazon’s can have some positive effects, said Margaret Hermes, chief operating officer of Chicago-based fintech firm Avant.
Hermes oversees areas such as operations, human resources and internal communications at the company. She also has a law degree and was a senior counsel at Groupon.
“A voluntary severance program will allow Amazon to reduce its workforce [while] at the same time separating from people who may not have been completely on board with where Amazon is going and were already thinking about leaving,” she says.
But there are drawbacks. The job market is cooling – especially in engineering. The buyouts offered may not take over the company even if they want to, making them less likely to actually help the company, Hermes adds.
Large-scale layoffs are more common, at least in public, in the battered industry. Notably, Twitter laid off half of its staff earlier this month after Elon Musk completed his purchase of the company.
Has a lawsuit already submitted above the process. Voluntary separations, like Amazon’s, can actually “reduce legal employment risks,” says Hermes.
People who leave a company on their own “are less likely to file claims related to their departure,” she says.
Finally, business owners should consider the morale of those left behind, she advises. An important part of that is carrying out layoffs or separations with humanity and the organization.
“If layoffs are not done in an empathetic manner, companies risk damaging the morale of the remaining employees [going forward]’ she advises.