Amazon’s shares have fallen about 35% over the past year. And the steep fall should now also affect the employees. According to a Wall Street Journal (WSJ) report, Amazon employee salaries could take a hit this year.
The report states that some Amazon employees will be paid up to 50% less than previously expected in 2023 due to the falling stock price. According to the report, salaries in 2023 are expected to be 15% to 50% below Amazon employee estimates. Employees’ annual salaries generally consist of a cash payment and an allocation of restricted stock units. However, with Amazon’s stock down 35% this year, total compensation is expected to fall sharply.
Stock units will be issued to employees on the basis that the company’s share price will increase by about 15% each year, sources told the journal. The sources added that the company’s stock price was expected to trade around $170 this year, rather than $97 where it currently trades.
In a statement to Business Insider, an Amazon spokesman said, “Our compensation model is designed to encourage employees to think like owners, which is why it links total compensation to the long-term performance of the company.
“There is some upside and risk to this model from year to year as the stock price can fluctuate, but historically it has worked very well at Amazon for people who take a long-term perspective.”
Amazon stock is not the only one
Amazon’s falling share price reflects a broader economic slowdown affecting tech companies. Shares of other tech companies, including Google, Facebook, Intel, and Microsoft, have also fallen massively over the past year. Amazon has also lowered its hiring targets for its retail business.
Amazon announces back-to-office policy
Amazon recently required employees to spend at least three days a week in the office. CEO Andy Jassy wrote in a Feb. 17 memo that he and the S-Team, a tight-knit group of executives from almost every aspect of Amazon’s business, decided at a meeting earlier this week that employees in the office “the the most of the time (at least three days a week). Amazon plans to implement the change from May 1st.
“It’s not easy bringing many thousands of employees back to our offices around the world, so we’re giving the teams that need to do this work some time to come up with a plan,” Jassy said. “We know it won’t be perfect initially, but the office experience will steadily improve over the months (and years) to come as our real estate and facilities teams smooth the wrinkles and ultimately evolve the way we want our offices to evolve set up to capture the new ways of working that we want.”