Amazon Reportedly Offered Voluntary Buyouts to Employees Amid Layoffs. Here's Why That Tactic Can Be Helpful, According to One HR Expert.
There are pros and cons to offering a "voluntary severance" package to employees.
Amid cuts that reportedly include some 10,000 jobs, Amazon is said to be offering some employees voluntary buyouts, or "voluntary severance."
That's according to CNBC, which reported on Wednesday that, per company messages, Amazon offered voluntary separation and compensation packages to some company sectors Tuesday and Wednesday.
This week, the company also conducted layoffs, Amazon has confirmed, but it did not comment on the number of employees who were let go.
"As we've gone through this, given the current macro-economic environment (as well as several years of rapid hiring), some teams are making adjustments, which in some cases means certain roles are no longer necessary," Amazon spokesperson Kelly Nantel told CNN about the confirmed layoffs.
"We don't take these decisions lightly, and we are working to support any employees who may be affected," she added.
The company did not immediately respond to a request for comment on the reports of voluntary buyouts.
Per CNBC, Amazon is offering employees a severance payment equal to three months' wages. It includes a week of pay for every six months the employee has been at the company and a stipend paid out weekly for three months, theoretically to pay for maintaining their health insurance. Employees will have access to the company plan until the end of next month, the outlet added.
The offers give employees until November 29 to decide to leave, and they are allowed to reverse that decision until December 5. If they do take the buyout, their last day would be December 23.
Amazon's moves this week come amid a larger labor rout in tech, which has seen historic layoffs in the past several months. Meta, for example, laid off about 11,000 employees earlier this month, the first time in its history that it conducted large-scale layoffs. Both companies faced disappointing earnings reports this year. Amazon's stock is down 44% compared to the beginning of the year, and Meta's is down about 67%.
When businesses need to cut expenses in a challenging economic environment, voluntary agreements like the one Amazon offered can have some positive effects, says Margaret Hermes, chief operating officer at Chicago-based fintech company Avant.
Hermes oversees areas including operations, human resources and internal communications at the company. She also has a law degree and was a senior counsel at Groupon.
"A voluntary severance program is going to enable Amazon to reduce headcount [while] simultaneously separating from people who may not have been fully on board with where Amazon is going and were already thinking of leaving," she says.
But there are downsides. The job market is cooling — particularly in tech. Those offered buyouts might not take the company up on it, even if they want to, which makes it less likely to actually help the company out, Hermes adds.
Large-scale layoffs have become more common, at least publicly, in the battered industry. Twitter notably laid off half of its staff earlier this month after Elon Musk finalized his purchase of the company.
A lawsuit has already been filed over the process. Voluntary separations like the one Amazon is offering can actually "reduce employment legal risk," Hermes says.
People who leave a company on their own "are less likely to make claims related to their departure," she says.
Finally, business owners have to consider the morale of those left behind, she advises. A key part of that is conducting layoffs or separations with humanity and organization.
"If layoffs are not done in an empathetic manner companies risk harming the morale of the remaining employees [going forward]," she advises.
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