My Amazon offer from last year was one of my highest ($500K first year TC for senior SWE in Seattle). Amazon has trouble retaining talent but I doubt compensation is the real cause (at least for recent hires).
Before last year they were seriously lagging behind in terms of comp. Even in EMEA I hear they couldn't hire due to low comp compared to other companies. Even non-FAANG were beating them easily.
What I hear from friends at Amazon (joined prior to 2020) is that their comp is well below market rates.
They probably were testing new paybands to see what stuck.
The bleeding has to be pretty bad for them to make an announcement like this though, otherwise they'd quietly bump up pay/bonuses for their top performers.
Yeah, I’d probably work more than 40 hours a week at Amazon, which is why I didn’t take the offer (I accepted another offer with similar comp and my WLB is pretty good).