Amazon may have ‘bad news’ for these employees, here's why

E-commerce major Amazon is reportedly planning to cut cash pay raises for its senior managers and other top leaders this year. According to a report by Fortune, this change will mark a significant change in the reward structure for high-ranking employees within the company.

The report claims that some of these employees may receive additional company stock instead of a cash raise. However, the report couldn’t guarantee these stock grants for the employees. As per the report, Amazon’s compensation team has already started notifying select leaders about the adjustments and detailing the company’s pay policy for this year.

Which employees will be affected by the change

The policy change is expected to affect employees classified internally as Level 6 or higher, the report noted. This includes employees in middle management and above roles.

The compensation policy change may not only include managerial positions but also certain individual contributor roles like senior software engineers, the report added.

The adjustment is expected to apply to all employees at these levels, across the globe, irrespective of whether they work in office environments or are in managerial capacities within Amazon’s fulfillment centres.

Amazon’s affinity towards stock compensation

Compared to other tech companies, Amazon’s compensation packages for several corporate employees have traditionally leaned a lot towards stock compensation.


Responding to inquiries, Amazon spokesperson Margaret Callahan noted that the company focuses on ownership and stock units (RSUs) form a significant portion of employee compensation, especially for senior staff.

Callahan also highlighted that Amazon’s stock prices have gone up over the past year, which suggests that several employees’ total compensation has exceeded way ahead of initial projections. As a result, the company is focusing on cash base pay increases for employees, especially for the ones whose compensation leans more towards base pay than stock.

This suggests that employees who are higher in seniority within the company, are less likely to receive a cash payment. However, employees who were recently promoted or internally transferred to Level 6+ employees may have some exceptions.

Why Amazon may be planning these policy changes

The adjustment in compensation policy aligns with Amazon’s ongoing efforts under CEO Andy Jassy. Earlier, Jassy announced that the company is working towards streamlining costs and enhancing profitability while focusing on strategic investments in areas like generative AI.

It's important to note that Amazon recently announced a major investment of $2.75 billion in AI company Anthropic. This investment further emphasises the company’s commitment to innovation and growth initiatives.

Moreover, Jassy’s leadership has also seen the company undertaking notable restructuring which resulted in the layoffs of over 27,000 corporate employees in recent years.