Comment by glimshe 4 days ago
I've been hearing about massive Amazon layoffs for a few years now. How come the company still exists? Are these layoffs followed by hiring at cheaper regions or different parts of the company? From my perspective as an occasional Amazon customer, things are pretty much unchanged.
> The revolving door helps keep costs low because employees leave before the bulk of their stock grants have vested.
I am not sure it applies to Amazon though. Amazon in the first year pays bonus in cash to compensate for 5% of the RSUs vesting. So, they actually loosing cash if people are let go after a year.
Yea I had to Google their total headcount when I saw the headline since the number does sound high, but in reality is only 5%.
When you factor in low performers and how most people here would view middle management in any other topic thread, it's not that insane. If in a pool of 20 workers around you, you can't find 1 worker you don't think is a step below the others, your hiring pipeline is better than most.
Amazon’s hiring bar has historically been very low, with a philosophy that if it doesn’t work out you can always just fire the person later. A similar philosophy exists for staffing up teams for speculative projects. If it doesn’t work out you can just axe the whole division after a couple of years. Periodic large layoffs are a natural consequence of operating like this.
Makes a dent when they fire at the high salary end and rehire at lower salaries.
The simple answer is that they hire more than they fire. In a lot of cases they will fill a role immediately after they fire the last person who was in it. Average employee retention at companies like Amazon (both voluntary and forced) is ridiculously low - something like 1.5 years. PIPs, forced burnout, mass layoffs etc. are all part of the corporate strategy. The revolving door helps keep costs low because employees leave before the bulk of their stock grants have vested.