The ecommerce behemoth Amazon is going to cut the number of shares it gives to its workforce from 2025, according to a company memo that was recently obtained by Business Insider.
The memo informed managers that the stock units would be reduced due to the “uncertain economic climate,” but it also claimed it would make up for this change by paying staff fairer wages.
This news comes just weeks after the company announced it would be laying off a further 9,000 employees, bringing its total number of displaced workers up to 18,000. Here's what we know so far.
Amazon Is Cutting Employee Stock Awards from 2025
Amazon is planning to reduce the number of company shares it hands out to its employees, as it prepares itself for an increasingly turbulent economic climate.
This news was leaked in an internal memo that was shown to Business Insider this week and has since been confirmed by Amazon spokesperson August Aldebot-Green. The memo informed managers in the company that stock awards, also known as restricted stock units or RSUs, will be reduced by a “small amount” in 2025, as part of the company's compensation review cycle.
This decision marks a major change of strategy, with Amazon handing out $19.6 billion in stock-based compensation in 2022, up 54% from the previous year and the highest amount in the company's history.
However, Amazon's decision to scale back stock awards isn't solely a cost-cutting measure. The memo revealed that as part of its revised compensation plan, the company was considering giving more cash to its employees — a decision that's been long-awaited by lots of Amazon staffers.
Amazon's Post-Pandemic Bubble Has Officially Burst
While Amazon has remained surprisingly optimistic about its market performance — with the company predicting that its stock price will rise 15% in the next two years — this switch from equity to cash-based compensation is a clear attempt to account for future stock variation.
Amazon, like other companies that cashed in during the pandemic, has fallen on increasingly hard times recently as they deal with bloated workforces and a steady decline in consumer spending.
In a desperate attempt to recover losses, the ecommerce titan announced it could be cutting 9,000 jobs last week across four departments of the company, bringing its total number of layoffs up to 18,000. This move follows similar decisions made by Meta, who announced 10,000 fresh cuts last month, and Google who recently fired 6% of its workforce.
Unfortunately, as big tech continues to brace for a looming recession, scaling back costs have become an industry standard. Learn more about what tech companies are doing to remain competitive here.