Why is Amazon incentivising its employees to walk away from the company?

By Joe McDonough


Posted on February 16, 2018

Amazon is offering its employees up to $5,000 if they agree to leave the company.

Jeff Bezos’s e-commerce giant has begun dangling the carrot to separate the wheat from the chaff, or rather those that want to work for Amazon from those that don’t.

Staff from the company’s warehouses and customer-service centres that accept “The Offer”, as it’s known in-house, will be paid commensurate with the amount of time they’ve spent at Amazon.

It is understood the packages range from $2000-$5000, and taking the money means you forfeit your right to work with the company again in the future.

It coincides with news that the retailer is laying off hundreds of workers at its Seattle headquarters. A rare cutback for the second-largest US-based corporate employer.

“We want people working at Amazon who want to be here,” Amazon spokeswoman Ashley Robinson told Business Insider.

“The goal is to encourage folks to take a moment and think about what they really want. In the long-term, we believe staying somewhere you don’t want to be isn’t healthy for our employees or for the company.”

Staying somewhere you don’t want to be isn’t healthy.

Zappos forward-thinking adopted by Amazon

Amazon actually pinched the concept from CEO of Zappos and Harvard graduate Tony Hsieh, who rolled it out 10 years ago to cultivate a positive culture within the workforce of his online shoe retailer.

The Harvard Business Review wrote in 2008: “Zappos actually bribes its new employees to quit!… Why? Because if you’re willing to take the company up on The Offer, you obviously don’t have the sense of commitment they are looking for.

“It’s hard to describe the level of energy in the Zappos culture–which means, by definition, it’s not for everybody. Zappos wants to learn if there’s a bad fit between what makes the organization tick and what makes individual employees tick–and it’s willing to pay to learn sooner rather than later.”

The next year, Amazon acquired Zappos.

Amazon moved into third place

Amazon leapfrogged Microsoft to become the third largest US company by market capitalisation for the first time.

Amazon’s stock surged 2.6% to a record close of $1,451.05 on Wednesday, lifting its market value by $17.69 billion to $702.46 billion. While, Microsoft shares climbed 1.6% to increase its market cap to $699.22 billion.

It is still a fair way off Apple ($US849.24 billion) and Google parent-company Alphabet ($US744.73 billion) at this stage.

And while it looks as though Bill Gates’ company has bounced back to displace Jeff Bezos’s in Thursday trading, it’s a fair indication of Amazon’s rapid growth.

Indeed, Business Insider reports the 23-year-old company’s shares have risen by 72% in the past year, compared to Microsoft’s 41%.

It also supports JP Morgan’s assertion that Amazon “has the potential to be a $US1 trillion dollar company over time”.