The Wall Street Journal reported on Monday that some Amazon corporate workers might get salaries up to 50% less than what was previously anticipated in 2023 due to the company’s declining stock price.
The individual with the knowledge of the situation who spoke to the Journal, salaries this year will likely be 15% to 50% less than the projections provided to Amazon staff. Annual remuneration for employees typically consists of cash wages and grants of restricted stock units, but due to this year’s 35% loss in the value of Amazon’s stock, overall compensation is expected to decrease significantly.
The stock prize of Amazon dropper from over $50 per share in February
According to Markets Insider statistics, Amazon’s stock price has dropped from over $150 per share in February 2022 to about $97 per share as of Tuesday, a loss of $53 or 35%. As per the reports, stock units are given to employees on the assumption that the company’s share price will rise by about 15% annually. The sources also stated that they anticipated the company’s share price to be around $170 this year as opposed to the $97 it is presently trading at.
A spokesman for Amazon told Insider in a statement: “Our compensation model is intended to encourage employees to think like owners, which is why it connects total compensation to the company’s long-term performance.” “That model comes with some year-to-year upside and risk because the stock price can fluctuate, but historically at Amazon, it’s had a history of working out very well for people who’ve taken a long-term view.”
According to a leaked video from last week internal meeting, CEO Andy Jassy stated that Amazon is dealing with “a very uncertain economic situation,” according to Insider’s Eugene Kim.
The firm along with other tech giants implemented massive layoffs
Like many major companies, Amazon recently implemented massive layoffs, stating intentions to eliminate 18,000 jobs, the most ever. Several businesses, including Meta, Google, and Twitter, have let off thousands of employees as a result of the COVID pandemic’s over-hiring and the weak economy.
The falling value of Amazon’s stock results from its retail business’s slowing growth and the general recession in the economy. Due to declining customer demand, the corporation reduced its recruiting goals for its retail segment by 7% last year. At the beginning of the year, Amazon said it would increase the basic salary ceiling from $150,000 to $350,000 in response to rising senior employee turnover.
Several employees learned later in the year that their pay packages were exaggerated as a consequence of a software glitch since it used earlier and higher pricing for Amazon shares.