Despite launching a bold new initiative to compete with ground carriers like UPS and posting openings for thousands of jobs in the Seattle headquarters, Amazon is taking the unusual step of laying off hundreds of corporate employees, what the Seattle Times describes as a "rare" cutback as the company continues to grow at a rapid clip.
Amazon tried to spin the cuts as necessary culling after an explosive hiring spree - its Seattle headquarters has gone from 5,000 employees to more than 60,000 since 2010, leaving several departments overstaffed and over-budget, according to the New York Times.
According to several employees, the rapid growth of the last two years left some units over budget and some teams with too much staff for their work. Amazon had implemented hiring freezes in recent months across several groups, a move that reduced the company’s open job listings in Seattle to their lowest level in years.
In a statement, Amazon acknowledged the cuts.
“As part of our annual planning process, we are making head count adjustments across the company — small reductions in a couple of places and aggressive hiring in many others,” a spokesman said. “For affected employees, we work to find roles in the areas where we are hiring.”
Some employees have already been informed of the elimination of their roles, and layoffs are expected to be completed in the next few weeks, one of the people said.
But others see a more sinister motive...
As readers might recall, Amazon was the subject of an unflattering New York Times bombshell back in 2015 that described a workplace culture where employees were constantly pitted against each other, and managers were expected to be on call day and night. The culture reportedly emanated from Jeff Bezos himself, who has frequently pushed for the company to cull inadequate performers.
Amazon denied that story, but the Seattle Times says managers are under pressure from Bezos to weed out the lowest-performing employees...
A manager in one unit making cuts said his team was briefed that Bezos and the Amazon brass wanted to put more pressure on managers to weed out lower performers and enforce spending discipline after the rapid growth of recent years.
"People are in terrible shape," he said. "There is so much stress on campus."
The company has also recently instituted a mandate that managers who oversee other supervisors must have at least four people reporting to them. The aim, the company says, is to reduce layers of redundant management and keep the company flexible and fast-moving.
Typically, the company has several strategies for "managing out" weak performers without resorting to layoffs...
In addition to the company’s annual planning and budgeting process, the first few months of the year also bring Amazon’s employee performance reviews and, for some, notices that they need to improve or face consequences.
Such performance improvement plans, dreaded among Amazon’s rank-and-file, come with a requirement that employees demonstrate improvement over a set period of time. Last year, Amazon introduced a career coaching program, called Pivot, described as a tool to help lower performers make it through such programs.
Employees put on notice can also choose to contest their manager’s determination that led them into the improvement plan in the first place, or opt not to participate at all and take a severance package to leave the company.
Some current and former employees say that some managers wield improvement plans to trim the size of teams without resorting to layoffs.
“It’s a well-loved strategy” to cut employees, one former Amazonian said, adding that during his time at the company he saw several talented employees “managed out” that way.
The Times also notes that the company has recently been laying off people at its various subsidiaries, which are based around the US. Cuts at Zappos, Createspace and Quidsi have cost nearly 500 jobs.
According to its Q4 earnings report, Amazon's total global workforce stood at 566,000 in December, up 66% from a year earlier.
Counting only corporate jobs outside of its warehouses, the company has a total of 12,500 open jobs.
As the company's recent Super Bowl ad might suggest, managers are continuing to approve job openings at Amazon Web Services and the unit working on Alexa.
Amazon denies that its "improvement plans" are used to achieve tacit job cuts. But considering all the job openings, if none of the employees who are being laid off instead of relocated - well, that looks suspicious, to say the least.
Meanwhile, the company is still actively searching for a location for its second headquarters - said to be a full equal to the Seattle office. It has recently narrowed its list of host city candidates down to 20.