Amazon CEO Andy Jassy says layoffs will continue into next year | Hacker News Reader

Amazon CEO Andy Jassy says layoffs will continue into next year

cnbc.com

146 pointsmrkramer168 comments

I think this was orchestrated to not give Amazon employees any internal (or very few) options for transfer. First they freeze corp hiring and thousands of positions dry up, then a long drawn out layoff is initiated that gets leaked in the press way before any senior leadership pipes up to talk about it. You have allegedly have 60 days to find a new position in the company. What positions? There is a hiring freeze. Plus in classic Amazon fashion the severance is on the low end of the industry. Plus the added departures just from the stress of not knowing who gets cut next. I guess this has been orchestrated for maximum attrition, which seems to be their forte over there under the orange smile.

I'm not a fan of Zuckerberg, but his communication about the layoff at Meta was much more timely, clear and empathetic than this note from Jassy.

- Zuckerberg: https://about.fb.com/news/2022/11/mark-zuckerberg-layoff-mes...

- Jassy: https://www.aboutamazon.com/news/company-news/a-note-from-ce...

Actually speaking with people at Amazon, teams are accepting internal transfers. External hiring is frozen.

They are accepting transfers. The number of available roles to transfer to has been drastically reduced.

This is not true. For example all of PrimeVideo has frozen even internal hiring, despite being identified as a growth sector for Amazon.

A few teams may still be hiring but they are very rare exceptions.

Uh-oh, this doesn't bode well for The Rings of Power...

The Rings of Power has a baked in number of seasons that were part of the deal. So they are good.

Not necessarily. They're contractually required to make X number of episodes, but there's no way to guarantee quality or ratings. If they make cuts in the staffing of budget for this show, the show quality will drop. Suppose they cut the VFX budget by 75%, for instance: the show will have horrible FX, but they can still meet their contractual requirements. Or they could cut actor salaries in future seasons (which maybe haven't been negotiated with the actors yet), causing key actors to quit, necessitating either re-casting (which is usually bad) or rewriting the story.

Rings of Power is Amazon Studios, not Amazon Prime Video.

> I'm not a fan of Zuckerberg, but his communication about the layoff at Meta was much more timely, clear and empathetic than this note from Jassy.

Ironically I remember some rabblerousing around Zuck's announcement as well but overall I would have to agree; Meta was a bit more transparent vs the staggered approach we are seeing from Amazon.

It's weird because there's still a 'public gap' with at least Amazon's announcement; as a person who has been at bigcorps, I know a hiring freeze is not a hard freeze or transfer-freeze, necessarily. But the overall messaging here is a bit more grim.

> Plus the added departures just from the stress of not knowing who gets cut next.

My cynical and experienced self knows that I've sat in interviews where beforehand I was given a psychological profile based on how the candidate answered a questionnaire. (The company was sub 2k employees, which is worth mentioning because it obfuscates who I'm referring to but also shows how 'accessible' this service is.)

From this viewpoint, I'd have to say they are hoping that the people who don't jump ship are those confident enough their existing options will vest that they will stay, and can handle the impending work-life-balance disruptions.

Of course, they might not -actually- be able to. And some who think they can, cannot, and that will come out in the woodwork.

Perhaps more sadly though, are those who couldn't make it and suffered external effects.

It's a real concern. I was 'stuck' in a job due to the Great Recession and the consequences of not just quitting and doing some random minwage gig cost me a good 5+ years of my life to get back on my feet (There's still parts I'm trying to fix!)

tl;dr - This sounds like turnover for SDEs may get closer to warehouse worker turnover.

I remember complaints about Zuckerberg's announcement too, but they were more about the tone of the announcement than the fact that people were being laid off. His email suggested that some people weren't pulling their weight and needed to pick it up or resign. Even if that were the case that's a management or business culture problem and shaming people isn't the proper way to solve it.

I'm very curious, how did staying at a job throw you off your feet more than doing a random minwage gig?

Sometimes I have a feeling I could do with a random minwage gig for some time due to fatigue from programming in a corporate environment, but have been putting it off due to it being a questionable financial decision, especially now with a looming recession. Wha

> I'm very curious, how did staying at a job throw you off your feet more than doing a random minwage gig?

At the time, minimum wage was a lot less and other expenses (helping pay for my now-ex-wife's college and car insurance, then a whole long story of undiagnosed ADD) made doing so untenable, especially since about half of that time was before the ACA was in a usable state.

I'll note however that there is a difference between fatigue (1), an unhealthy working environment (2), and abuse (3).

The job in question was in category 3. It is just over 10 years ago, at that job that my boss told me I couldn't have a day off when my mother had a 50/50 shot of surviving the next 48 hours.

Category 2, is something you have to recognize as such, because it has a subtle difference between 1 and 3. (Or, maybe, 3 is a subset of 2.) I've been in that boat, and it tends to be a situation where you can't take a proper break, or every 1-week vacation you ever take makes you regret taking it.

Meta employees were angry about the sudden layoff announcement and access cut off. Many wanted an advance notice like what Jassy has given. I guess there is no "right" way to do this.

In this particular case, what Jassy seems to be saying to employees is that they should be customer obsessed and work hard for the holiday season but he cannot guarantee they will still have their job in Q1. That sucks. My heart goes out to everyone who is and will be impacted.

Yeah basically going to make everyone work hard over peak to try and keep their jobs then start the cuts in January. The cuts will probably be whatever the delta is between the missed revenue from q4 and what wall street estimated.

> The cuts will probably be whatever the delta is between the missed revenue from q4 and what wall street estimated

This is backward looking. The right thing to do is look at your forecasts of the future and adjust according to those (because the past is in the past and is unchangeable).

At the end of the day all that really matters is the comp package.

If a layoff isn't an attempt [1] to get rid of under-performing talent or dump under-performing business divisions, then I've always felt that across the board pay adjustments are a much more ethical approach.

I'd be much more inclined to stay at a company that lowered my pay 20% than a company that laid off my coworkers. Not letting people go shows empathy, and uniform pay decreases align everyone's interests in getting back to a good state.

I could see why some might jump ship from a poorly performing company during ordinary economic times, but during this down tech cycle, the grass isn't necessarily greener. Going elsewhere might be difficult or put your head back on the chopping block.

[1] Or as some might view it, an opportunity.

For people on the lower end of the pay spectrum, 20% is a lot. I don't know exactly the wage distribution, but it's not like the customer support people being laid off are getting SWE salaries. So "let's just uniformly cut salaries" can be a much harder proposition.

And then you get into the difficulties where the highest paid people tend to be paid with stock, so _they already are having pay cuts from drops_. When you're looking at "cash on hand" problems it's hard to get everything balanced right. Though I do think it's worth it to try and make something work.

Personally I'm a bit of the opinion that larger companies have a responsibility to bank in employee costs more long term than in growth phases. Especially places with higher attrition, if you're able to run the clock for a year hiring freezes + shutting down teams that you want to shut down anyways feels like it would be less demotivating. But I don't know

Nah the best people just leave

"Angry?" Sheesh...

Meta employees got gold-plated severance packages. The complainers have other issues than the layoff.

> For those who lost their job in the United States, Meta said it would pay severance of 16 weeks of their base pay, along with two additional weeks for every year they worked at the company. Laid-off workers and their families will have health care paid for six months. [0]

[0] https://www.nytimes.com/2022/11/09/technology/meta-layoffs-f...

Yes, angry. For people on visa, it doesn't matter if severance is gold or silver plated. They will only have 60 days to find another job or leave the country. Giving an advance notice will help them mentally prepare and start looking for a job assuming the worst case so they get some buffer days.

I agree though Meta's severance package was quite good.

Sort by salary. [0] Only ~8/2k+ visa employees have a salary < 100k.

My stance is that the subset of visa holders impacted by layoffs is STILL a very fortunate crowd stings no matter what.

[0] https://h1bdata.info/index.php?em=meta+platforms+inc&job=&ci...

Honestly if it needed to be done, it was kind to do it before the holidays with the generous severance. I think a lot of these folks might FIRE or otherwise start down a different path. I don’t know how Amazon is doing this right during their peak sales and logistics season.

> Many wanted an advance notice like what Jassy has given.

There were 48 hours of layoffs and no communication from any CEO, S-Team member or other senior leadership at Amazon. Beth Galetti (HR) took the time write up a post about the hiring freeze a couple weeks back but radio silence from leadership while the rank and file scrambled to find out who was affected. With Amazon being so fastidious about communications to curate their corporate image, it's surprising that they didn't bother to communicate unless it was (possibly) intentional.

I appreciate Andy finally sending something out, but it feels like this was a big miss at the very least.

Source: https://www.vox.com/recode/2022/11/16/23463223/amazon-layoff...

I agree. Andy's message seems like a course correction due to backlash from employees rather than proactive.

I guess there is no "right" way to do this.

I've been through a number of layoffs all the way from getting notice that my last day is 2 weeks from the announcement to 9 months. To be honest, the shorter period was better, at least for me.

When it's a long notice (say >2 months), you enter into this weird gray zone. You're neither unemployed nor employed with a long term job. All motivation disappears and you're just "waiting". Obviously you can use the time to find a new job, but there is only so much time you can devote to that.

It was far better to get notice a month or two in advance of pending layoffs (exactly who not disclosed), then get an announcement that your last day is in 2 weeks, but you'll get 60 days of pay, then your severence payout.

Felt like "ripping the bandaid off" was much preferable. At least you can get on with things at that point.

Amazon has a bunch of internal openings and hiring waivers -- for the profit centers. I think most of the layoffs will be belt tightening. Including my entire org.

If your goal is to cut costs and you have no net reduction in HC - then you've failed. What did you want them to do - besides not wanting them to cut costs. It's an even worse look to get rid of 20k people and have 25k openings after.

Maybe you have features that can be built somewhere like aws where you have already sold it to a customer and you just don't have the devs. And you know you're going to cut from a part of the company where there is no expectation that the features from the devs will increase revenue. Tuning up the Alexa weather app isn't likely to get more customers but and aws database offering that some other fortune 500 is asking for might be revenue positive a couple months after release.

There more to it than the total cost of devs it matters what people are working on and if the products will produce revenue.

And they did that math and decided to reduce costs. They are not running a charity for wayward coders over there.

I understand that, they had like 40k job openings a little while ago, and they are cutting 10k so my guess is that plenty get re-aligned and some don't.

The denial rate for H1B visas dropped from 24% to 4%. This precipitous drop in denial rates was almost immediately followed by some of the largest layoffs in tech history. My belief is that the BigCos are using layoffs to constructively abuse the H1B visa program (and, more importantly, abuse terrified H1B workers).

I'm fairly involved in politics and try to contribute in large enough ways to at least be a known entity to campaign managers. If you're the same, now is the time to continue your civic engagement. I'm fairly confident DoL will be watching BigTech labor practices like a hawk, looking for both intentional domestic labor displacement and also abuse of H1B workers. I will not be surprised if Amazon is at the center of intense executive and legislative scrutiny for the next two years as a result of massive H1B allocations immediately followed by massive layoffs.

If you are an H1B worker being asked to work excessive hours or take on new responsibilities, reach out to DoL (NOT USCIS). If you are a manager/director privy to conversations about labor force reduction and H1B status is mentioned, reach out to DoL. Better to be the whistle blower than mentioned by name in a deposition.

I cant speak for the crummy employers, but my employer was very sensitive to immigration status. They were willing to push H1B holders out to the very last wave of separations to buy them as much time as possible to find a new role.

But yeah, crappy employers are out there, so any H1B holder should educate themselves on their rights and the employers obligations during layoffs.

I thought H1B abusers were people like Accenture and not Amazon. Consulting where it’s about bodies; the big co’s need talent in whatever form they can get and tend to pay well for it. It’s hard to imagine to me that Amazon is laying off just to get people more cheaply.. they can easily just pay less or hire more abroad.

They could, but why? The big cos colluded for years on wage fixing [1]. Amazon absolutely churns through SWEs; the average tenure in engineering roles is a year or two.

[1] https://www.iphoneincanada.ca/news/apple-google-tech-compani...

you thought wrong, they hire managers from these companies and essentially work the same way.

Has the denial rate for all companies gone down? Or could it be that companies that were getting the most denials have submitted less petitions for H-1B workers?

Sponsoring an employee on an H-1B has become significantly harder in the past few years, especially because of the odds of the lottery decreasing year over year. Another theory could just be that with the increased cost and uncertainty of attempting to sponsor an employee on an H-1B, many companies are resorting to alternatives, clearing the field for companies that have a more genuine need for H-1B workers.

They are not related. H1B Denial rate went down because of administration change. Layoffs are due to fed tightening to combat inflation.

Hmm, yeah I could see that having some broad support, but we'll see. Don't forget: big company, big lobbyists.

The layoffs will continue as long as interest rates remain high. Not a lot of people know the relationship between lending and big tech, but suffice to say that the bloat we’ve seen from companies with no product except user data will be unsustainable in the face of higher interest rates. Permanently, if they remain high.

Big tech income depends on the whole economy, most of which interest rate dependent. I wouldn't say that the business model is unsustainable (it's more complicated than you said), it just becomes less profitable (as everything else).

Exactly. Interest rates rising makes pretty much everything less purchasable for people.

Not just income, also investments.

The recent hiring has been fueled by record profits from the lightest monetary policy of all time

Most businesses I’ve talked to and worked with that borrow meaningful amounts are not so dependent on rates that increases of this much will meaningfully kill sound businesses. Rate changes as quickly as they are is the dangerous part, because it requires throwing out a lot of their short term plannings. Businesses and business leaders that have been around since the 90s are used to interest rates in excess of the current amount.

The economy at large is much bigger concern and impact to businesses. Even land development would continue, with only minor hiccups.

I think Warren Buffett had a very related take. Basically, in America at least, real businesses which simply make a profitable product well, are no longer viable. The only viable businesses are those which have some "trick" which appeals to the capital owning class, I feel like crypto is a pretty good example of this in action.

So we see this endless game of "large" "profitable" companies that are the equivalent of 90s vaporware, doing nothing but shuffling numbers around in a spreadsheet without creating value. But the government is terrified of any form of meaningful regulation (because so much campaign finance is tied into these zombie corporations)

Interest rates will remain high as long as federal spending remains high.

> The layoffs will continue as long as interest rates remain high

Real rates are still negative. Isn't that all that matters?

No? High nominal interest rates are clearly themselves still bad for business.

Only recently turned positive, it was negative until September:

https://fred.stlouisfed.org/series/REAINTRATREARAT1YE

> High nominal interest rates are clearly themselves still bad for business

I don't get why nominal matters. Say you borrow 100k and have to pay it back with interest 1 year from now. Inflation rate as measured by CPI/PCE is higher than the interest rate of your fixed rate loan. What you do is basically mobilize that capital and transform it into products and services that you'll sell to customers.

Inflation works in your favor because prices of the goods that you sell during the year following you taking a loan, they rise at a higher rate than your fixed rate loan

Bad for tech business whose cost is aggressively on R&D and revenue not inflation-proof.

Great in theory - but in practice you can't manufacture your product due to supply chain issues triggered by economic uncertainty and under-investment by your suppliers. Even if you could get your product out there, consumers aren't inclined to make new non-essential purchases when their household finances are being strained by mortgage and car loan rate rises.

It isn’t even that high.

https://tradingeconomics.com/united-states/interest-rate

It is relative to zero though, which is when these companies had stock prices go through the roof.

Seems cruel to announce this with such a long timeframe before the layoffs conclude. Will leave lots of people worried over the holidays.

It also gives more time to look for new jobs as a backup

Which probably represents an adverse selection problem for Amazon. Their best employees have seen their long-term comp prospects decline significantly (along with everyone else), and now have added uncertainty about their future at Amazon, whether or not they're laid off. If they are, they're going into a competitive market with fewer FAANG-level openings being hired for. If they aren't, they're bag-holding for the same amount of software with fewer team members to cover it.

Why wouldn't someone look under those circumstances?

There could be lots of reasons? Interviewing is a hassle. You might like your job and/or coworkers. You might (justifiably or naïvely) not be worried about being laid off. And with all the layoffs all over lately, you might figure it’s going to be a lousy time to be looking elsewhere.

As a parent of two small kids, preparing for interviews is a major hassle if you're not a leetcode wizard. I can barely manage 1 practice question a day because I'm so exhausted all the time.

I'm at meta and was fortunate enough to not be laid off but I'm starting to prepare for interviews over the next 6 months and trying to get myself in the mindset that I don't need to be at a "top" company chasing the best TC anymore and should focus more on joining somewhere I can enjoy and believe in the products.

I agree with you completely. I have a two-year-old and five-year-old. My partner and I both have pretty demanding day jobs > 45 hours a week regularly. It’s very difficult for me to leetcode grind and balance everything in my life. I know I could succeed in a lot of these FAANG organizations if I were given a chance, but finding time to grind is difficult. I almost wonder if the leetcode interview style is intentionally designed to favor those with ample free time and no other obligations.

Not only cruel but unproductive. If I’m on a bloated team at Amazon right now, why would I be working on anything but my resume?

Anytime I’ve been confronted with the possibility of being laid off in my career I’ve put my head down and worked harder.

Never been laid off thankfully.

Anytime I’ve been confronted with the possibility of being laid off in my career I’ve put my head down and worked harder.

I have been fired or managed out every time.

That can't be the majority opinion, given how most companies try to avoid communicating the threat of layoffs in advance.

But being laid off rarely has anything to do with performance.

One answer would be: Because the 'unregretted attrition' or PIP quota is still a thing!

But also, people voluntarily quitting is even better for Amazon.. no severance.

Why should anyone care about a PIP quota? Someone getting laid off or even fired in times like this wouldn't remotely make me think negatively of them.

I would always prefer to be laid off vs fired since the latter means it's unlikely I could return to the company in the future.

Because it's your job and you're a professional.

Yup, and I prefer to contribute in places where I’m valued

yeah tell yourself that and be a good boy.

Because you’re getting paid to?

I mean if you want to stay, why wouldn’t you continue to work in a productive manner?

The world is smaller than you think. There’s a good chance that if you ever interview at. Another big tech company someone will talk to someone who worked with you and your reputation will follow you around.

you are over 50 right? who in their right mind will work overtime during peak season with a damocles sword over his head. you are getting paid to do normal work not overtime and go beyond. you do exceed expectations because you want a raise or promotion and you sacrifice your time and family life for that. now knowing that you are likely to get fired next quarter (because layoffs are NOT about performance) changes the deal quite a bit...

Jassy made a big mistake

I’m not over 50:). Not sure why you’d make a wild guess like that.

No one mentioned working overtime except for you. If you want to work overtime then you do you!!

I can’t imagine being so lazy that you still go to work and collect. A pay check but don’t do any work for the company and just work in your resume as you suggest.

There is a happy medium between working overtime and doing no work at all.

Hopefully you’ll find some work life balance in your life, because work really can be fun and fulfilling if you are lucky and work at it.

You want to stay because you need a job to get paid, and feasibly to stay in the country. Once you get another job, there’s no reason to.

It's pretty obvious at tech companies generally that things are not as stable or on the upswing as they were a couple years ago. Better to be honest that change isn't over.

Is it professional to treat employees like a line item on a balance sheet and then subsequently mismanage that line item?

Easier to tame the workforce if kept under threat for longer time. Want to work from home? You may be chopped. Want better working conditions? You may be chopped. That complaint about your manager? You’re at it.

Ah yes, the guys who makes 6,474 times the median Amazon employee’s salary is going to lay off a bunch of people doing actual work to cut costs.

https://fortune.com/2022/06/02/fortune-500-amazon-ceo-andy-j...

Andy's package is so excessive that even the advisory board objects to it

https://www.businessinsider.com/amazon-ceo-andy-jassy-salary...

> In 2021, Jassy received $212,701,169 in total compensation, Insider reported in April, citing a proxy filing the company submitted. Only $175,000 of that came from his salary. The rest came from shares: He was awarded 61,000 shares that would vest over 10 years, worth $211,933,520, when he became CEO.

Don't worry, the vest is back loaded and he'll get pip'd before that kicks in

>He was awarded 61,000 shares that would vest over 10 years, worth $211,933,520, when he became CEO.

How did they get $211,933,520? 61,000 shares multiplied by the price at the time (eyeballing the chart, the 2021 price looks to be around $160) gets you $9,760,000.

There was a stock split

So 21 million a year. Levels.fyi has an SDE III at 355k a year [0] and a level above that at 538k which is usually what most pure IC managers are at. That's a 57% comp for moving up one level moving. 21,000,000/350,000 = 60x. If they have say 8 managers between IC and CEO, thats 60^(1/9) = 57.6% comp growth per level.

Doesn't seem so ridiculous of a compensation if you want to keep the carrot above the stick at each level of the management chain.

[0]: https://www.levels.fyi/companies/amazon/salaries/software-en...

Why does it count as 2021 total comp if it doesn't fully vest until 2031?

He generated practically all of Amazon's earnings over the past 15 years . When amazon retail was burning cash, AWS was generating high margins keeping the company alive.

Andy Jasy is under-compensated IMO. He should be getting half of Bezos' shares.

some people on this site have brains as smooth as bowling balls

sorry?

Andy Jassey will make a lot of money as CEO of Amazon, but you're taking a long term stock comp vesting plan based on performance based incentives and comparing it to the annual salary of a workforce skewed by hourly paid warehouse workers.

Andy Jassey's salary is $175,000

We all know that CEOs get most of their comp in equity. It’s not a gotcha. It’s insanely high still, for a company laying off thousands of people.

That’s a pure tax dodge. His actual compensation is vastly above 175,000$ but by structuring it differently they can vastly reduce the taxes paid.

And how exactly the taxes are being dodged? All those millions in RSUs are still taxed as an ordinary income when they vest.

Not sure if this is the case with his plan but companies will issue options to executives for the tax benefits. Typically they issue incentive stock options (ISO) and any amount over the strike price is long term capital gains.

Time value of money means it’s better to be paid money today than in 5 years, but taxes mean it can be beneficial to get RSUs on a vesting schedule rather than cash.

For ease of calculation: 50% income tax and 20% capital gains, stock doubles in value.

Get paid 10M, pay 5M in tax. Buy 5M in stock which is worth 2x as much in 5 years when you sell it. Pay 5M * 20% = 1M in capital gains. Keep 9M at the end of the day.

Get paid 10M in RSUs. Sell when they vest at 2x the value in 5 years. 20M pay 50% in capital gains and keep 10M.

<<Get paid 10M in RSUs. Sell when they vest at 2x the value in 5 years. 20M pay 50% in capital gains and keep 10M.>> You probably meant to write 20M pay 50% in income tax.

I still do not get your point. This situation is tax advantageous only if the stock appreciates. if the stock is flat there is no tax advantage. If the stock declines this situation becomes a tax dis-advantage. Motivating executives to increase stock price over a medium time horizon (these RSUs vest over 4 years) to have this tax advantage is not a bad incentive...

Executives generally renegotiate their contracts if the stock noticeably decline before RSUs vest assuming they don’t get fired or just leave.

That’s the thing executives are negotiating the kind of compensation they want and the risks they are willing to live with. The point is to get paid in a tax advantaged fashion without the risks associated with stock options.

Nope that’s not how it works.

Get paid 10M in RSUs, when they vest at 2x: pay regular income tax on 20M.

There’s no difference between an RSU vest and getting cash then immediately buying shares. Sometimes there is with options but not RSUs.

Add dates and it clarifies what’s going on.

In 2022 you get 10 million in A) RSU’s that vest in 5 years or B) cash in 2022 C) cash in 2027.

Of course no company actually pays people before they do work, but this does explain why Amazon’s RSU’s don’t vest 25%, 25%, 25, 25% instead the last 2 years are 40% and 40%. And people get issues new RSU’s before the old ones finished vesting.

No need for adding dates. RSU grants are cash, ordinary income, given as shares at vesting.

If some company handed out RSU’s on Jan 15 2023, that vested on January 16 2023 then it’s effectively just cash, but that’s not how they are used.

A single RSU grant normally results in multiple different taxable events across several years those dates are a major factor in what RSUs are. Both in the uncertainty around actual value and when you actually pay taxes.

But, it’s better to understand them as part of a contract. A hypothetical CEO negotiates RSU and a golden parachute that’s equivalent what they would lose in RSU grant when leaving, why? What advantages does that contract have over pure cash both from the CEO’s perspective and the companies?

The advantage is simple, it allows the amount of cash given to move with the stock price. In the ceo case the board wants to align incentives (between the ceo and the share holders).

In theory yes, but reality is more complicated.

Steve Jobs is rather famous for renegotiating his contract after the stock price fell, but this is fairly common. The compensation package as a whole must be sufficiently attractive, and of course when you look into things like golden parachutes any one element of a compensation package never tells the whole story.

> Get paid 10M, pay 5M in tax. Buy 5M in stock which is worth 2x as much in 5 years when you sell it. Pay 5M * 20% = 1M in capital gains. Keep 9M at the end of the day.

So 10M comp package + 0 starting capitol vs 0 comp package + 5M starting capitol? The latter isn't a comp package.

Nobody is going to pay you before you do the work, but “Time value of money means it’s better to be paid money today than in 5 years”

Thus, 10M in RSU that vest in 5 years > 10M in cash today (not a real option) > 10M in cash in 5 years.

However, this also helps explain 5%,15%, 40%, 40% vesting schedules they are somewhat better than 25%,25%,25%,25% for the company because it better incentivizes staying and for the employee due to tax advantages.

But there are no tax benefits. If you get 10M in RSU that vest in 5 years and in 5 years when they vest they are now worth 20M, you get taxed for 20M of income and not 10M income + 10M cap gains.

This gets more into the weeds, RSUs rarely vest evenly across time. A 10,10,40,40 has tax advantages over a 25,25,25,25 vesting schedule. Further, RSUs are only one aspect of a compensation package.

If someone can negotiate both RSUs and a golden parachute then they are simply better off than taking that exact same salary in cash. The nuances of every contract are different, but it’s not difficult to construct something more advantageous than cash.

These are mostly stock options which they never sell and take loans against.They take on loans to excercise them so they don't get taxed at all.

This stock award is specifically RSUs not options and RSUs are treated as taxable income the moment they vest.

Except they are not. They are all RSUs

I don't think you know much about Andy Jassy if you are saying that he has not done actual work.

>> Ah yes, the guys who makes 6,474 times the median Amazon employee’s salary is going to lay off a bunch of people doing actual work to cut costs

Yeah. That's what I would do too if I was the CEO of Amazon.

What would you do differently?

here's an example of what can be done differently https://www.gamedeveloper.com/business/nintendo-management-t...

That would require integrity and empathy.

the two qualities that the corporate ladder selects against

2014 article. I'd stop being amused if Nintendo's current management still had the balls to do this.

It's the same management last I checked, and C level management in Japan is generally compensated at a much lower rate than in US in general. In fact, US has wildly higher CEO pay than anywhere else

https://www.wtwco.com/en-CA/Insights/2020/12/ceo-pay-landsca...

Is there any theory on why Amazon decided to spread the cut over months of time instead of planning sufficiently and then having a decisive cut?

Incompetence?

To maximize morale pain so more people leave without having to pay them severance. If you knew you were at risk of being laid off sometime in the next few months, wouldn't you start looking now?

But doesn't this also mean you're more likely to loose your best employees (who can more easily find a job elsewhere) and retain your worst ones (who'll consider an unpleasant Amazon better than any alternative)?

Where are they going to go at this point? Not many places hiring that will pay more than Amazon.

One question I do have is since H1B is technically only allowed when there is not a citizen who can complete the job, does that mean that people on visas would be laid off first or does that not go into consideration for the layoffs.

Google, Apple, Microsoft?

There is no such requirement to employ an H1B. The only requirement is to pay atleast prevailing wage for the role you're hiring for.

This risks the dead sea effect though.

https://medium.com/geekculture/the-dead-sea-effect-d71df1372...

squeeze maximum efficiency out of people who are going to work even harder hoping to save their job only to get laid off anyway

It’s a cost-minimization strategy. I’m sure one of the 300+ economists at AMZN had to write a 6-pager on this question.

Layoffs are labor level reductions amid ongoing or expected periods of excess labor capacity. It’s almost a classic supply chain/operations management problem. Classically an Amazon core competence and problem at Amazon [1].

There are both shortage and excess costs to labor levels (ie. labor inventory) vs labor demand, combined consider as a supply-demand mismatch cost. To minimize this cost is to create a perfectly coordinated supply chain/inventory system through minimizing shortages and excesses.

Statistically speaking, it is incredibly difficult for a company to perfectly return to that optimal level of supply in 1 single action because the optimal level is difficult to measure in the short run. Therefore, by monitoring supply and demand of labor over time, you are able to make more precise adjustments to return to optimal level of labor.

Sadly, this strategy implies Amazon likely used a lower percentile estimate of required labor reductions for initial layoffs, meaning the mean/median estimate of required labor reductions is likely higher than already announced.

[1] https://www.vox.com/recode/23170900/leaked-amazon-memo-wareh...

I think Amazon is being honest and the rest of the industry will also being doing future lay offs.

I don't understand how everyone can do this at the same time and it's not connected and planned.

It is connected. Biden asked wall street / fortune 500 companies to freeze / slow hiring / wage increases. This is part of a larger plan.. When the new prime minister of England presented a budget with a taxcut she was shortly shown the door.

Do you have a link to a news article from a reputable organization that said President Biden asked for this?

https://www.google.com/amp/s/finance.yahoo.com/amphtml/news/...

Biden's name isn't uttered in this article at all. Nor are there any statements from any Fed or government officials saying they're trying to do this. Any such suggestions are interpretations being made by independent analysts trying to read the tea leaves.

Try again.

I saw him say it on tv as well. I'll be your source and if that is not enough then you will have to live in a world where others know more than you. At some point the information will reach you.

That's not the way to persuade people of your correctness. If you make a claim, the burden is on you to support it with facts and evidence.

Otherwise, people will naturally treat it with the skepticism it deserves. Or, put less charitably, as the nonsense that it is.

A lot of people still haven't found that special source that they trust to tell them the world is not flat.

I'm not looking to persuade that group or yourself. I'm happy to leave you in your own worldview. My original comments were for others. If you want someone to care enough to persuade you, pay them.

> don't understand how everyone can do this at the same time and it's not connected and planned.

Oh! It’s very much connected like this https://www.vanityfair.com/news/business/2014/04/apple-googl...

Since Amazon lays people off all the time any way, I'd say this is more of a stern reminder to get crackin' than new news.

Layoff is pretty different from termination. I.e. layoffs happen because of economic circumstances, but termination might happen for many reasons, i.e. underperformance (after or instead of PIP), misconduct, etc

In California, one gets laid off (not fired, but laid off) after not passing PIP. One can also get laid off "at will" - any time for any reason.

When you first get a job, you sign an employment agreement that outlines your responsibilities. If you're actually doing a poor job, why would the employer bother putting you through a PIP? They'd just lay you off. The PIP is a renegotiation of your employment without giving you a raise. They'd like you to do more for less because they think that either the market or your financial position is in their favor.

PIPs are mostly used so they can get rid of people without fear of a lawsuit. It generates documentation that “hey, we tried” in case it’s needed as evidence later.

Wow isn't the conventional wisdom cut once and cut deep? The morale hit for nonstop drip of layoffs is immense. I can't help but think Amazon is going to really destroy their reputation as a place for technical people to excel.

It’s hard to know where that reputation comes from other than themselves and their hiring process. Nearly everything Amazon makes is a shoddy product that scales in a way such that it doesn’t matter to them. They don’t excel at anything they do except scale with acceptable (to them) failure rates.

no matter how big of a hater u ar of amazon you can't deny what they have going is really impressive, sure aspects are bad but still impressive

Layoffs will continue until morale improves.

Not quite: Layoffs will continue until the stock price recovers.

This is a reference to the common saying "Beatings will continue until morale improves" and indeed a variation of it includes my version above, apparently said satirically in 1964.

https://quoteinvestigator.com/2020/07/15/morale/

I don’t think Andy’s up for the job:

1. Amazon lost $1T of valuation during his tenure

2. Continued hiring aggressively even until last month

3. Failed at most important skill of a CEO - Communication

So basically Amazon is trimming some bloated teams and re-assessing business units with poor financial performance. I know some people like to paint Amazon in a bad light but given where the economy is heading it would be concerning if a company wasn’t doing these things. Some trying to make this out to be more than it is.

It is more. Amazon gambled the money and fate of these employees hoping growth in covid will stabilise or might even grow. Now the small bubble of online shopping fiesta is coming to an end they are throwing out these employees as a dead weight, while they were the load bearers in high demand

not really. they remain vague about it. they'd likely waiting for Q4 number to trim ALL teams from all divisions including AWS.

SV businesses used to show off their innovation, intelligence, and eternal optimism. They used to think different and change the world with revolutionary ideas, including in employment.

Now they show off their aggressiveness, power, ego, and disdain for all else - the world, employees, human beings. Now they invest in real estate and cryptocurrency, and flex by laying off employees and working them harder. What innovators.

They've become dinosaurs. Who are the next innovators? Who has optimism, vision, and drive?

Or until morale improves... :-)

Of course they would not fire their retail people during the cash making season. Make them work hard, post your B's of profits and then promote them to customers.

"promote to customer" seems cut and paste from our internal blind :)

People returning to mandatory onsite means less disposable income and less free time. Naturally, online content and e-commerce revenue would be severely impacted.

Classic Amazon. Guessing due to the scary nature of them, they hope to motivate their workforce, and push back against all this work reform stuff.

What does it tell about our economy when a value creating company has to declare layoffs whereas the ad-companies are still untouched?

I can only think of one one major tech ad company that's _so far_ untouched.

FYI: Amazon has a large and growing ads business. It's actually one of the bright spots at the company.

If you are unsure whether you will be fired, just assume you will and consider this time as a paid job search.

Money wasted on useless "software" jobs

This shift was long overdue, hopefully we'll start to see meaningful projects that moves humanity forward from now on, economy of the self has to go

I doubt that'll come from amazon, but the signal is loud and clear

Actually tech was a good example of an industry that distributes wealth around. Without high salaries that money would have sat idle in big pockets. I imagine a ton of gardeners, mechanics, restaurant workers, travel industry workers, will be affected by revenue lost from software engineers not working or not being paid what some people think is a high remuneration.

Anyway not to worry. Software is complex. If the industry is not paying well then it will be difficult to attract smart people to deal with all that complexity. Lower pay, less smart people, less competitiveness, less revenue for us companies. Simple as.

Inflated salary in tech jobs = inflated real estate price = struggling lower middle class, go visit SF

But that wasn't even the point i was trying to make, merit is no longer rewarded since the expectation for a high salary is the baseline, hence it's not usual to see high burn rate in big corporations and highly valued startups, inflating everything up to the point where nobody can compete anymore unless you go hire in india/asia with the problems that comes with it (socioeconomics)

Check the various hiring posts from YC, it's telling

> then it will be difficult to attract smart people

That's a documented bullshit, with a high salary you don't attract "smart" people, you attract people attracted to the money

Look, a "smart people" contacted him to offer his help for bare minimum compensation; that defeats your point

not everyone in tech is making 6 digits working at FAANG. stop blaming the workers. the problem is the gov, the economists, and the crazy policies during covid. there are plenty of other jobs high paid such as consulting, legal jobs that are not creating any clear value as well. at leas tech changed the way people buy things, communicate, move around, travel and created wealth into the midle class like no other profession. to earn well in law you need a network and a family that knows how to guide you through the best schools and best companies. same for consulting/banking a commononer won't get into rotschild or mckinsey. tech allowed all kind of people to build wealth.

> tech allowed all kind of people to build wealth

Not on the premise of merit, and your take is valid for every jobs, it's the definition of a job

I agree with everything else you said

if we were a meritocraty we would have a 90 year old grandpa with memory loss and other mental impairment as president. we're in a peter sellers movie

I imagine a lot of middle class people are benefiting from the … software engineer middle class cashflow. Your logic is a bit like wanting to make the middle class poorer because its driving prices up and the lower class cant afford things. Then of course the lower class should earn less because the unemployed and homeless cant afford things.

Computer science is hard. Why would someone spend their whole life studying, being sucked into a world of machines, sacrificing social life and friendships to be immersed in a job that doesnt pay well? High end software isnt about maintaining a website after getting a pdf certification from a boot camp. Its real complex and difficult.

> I imagine a ton of gardeners, mechanics, restaurant workers, travel industry workers, will be affected by revenue lost from software engineers not working or not being paid what some people think is a high remuneration.

Trickle-down economics? That’s not exactly a bolstered argument.

Trickle down doesnt work for billionaires that game the system. For most engineers life is about living.

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