03-28-2024
From November 2022 to March 2023, Amazon laid off 27,000 employees. According to a report from Business Insider, Amazon placed thousands of employees on Performance Improvement Plans in the months leading up to its several rounds of layoffs.
Performance improvement plans (PIPs) formally alert employees that the company has issues with their performance. Employees can either improve or end up out of a job. In April 2022, Amazon placed almost 2,000 employees on PIPs. When layoffs began at the end of 2022, more than 3,300 workers were on PIPs. In January, the number continued to climb. Moreover, Amazon doubled the number of employees moving into the second phase of the PIP process. Per Yahoo Finance, Amazon is known for imposing a "high-performing culture with demanding standards." The company fires a percentage of its worst-performing employees each year, called "unregretted attrition." Amazon encourages managers to begin the PIP process if the company is not on target to meet the 6% attrition rate.
Large tech firms implement stricter performance requirements when they want to reduce the number of employees. Meta used more stringent performance standards for employee bonuses and lowered payouts while laying off 21,000 employees from late 2022 through early 2023. Google also laid off employees and told managers to look at office attendance when evaluating performance. Companies hope employees will leave voluntarily, saving payout costs and avoiding the diminished morale of layoffs.
Amazon denied its 2022-2023 layoffs were connected to the PIP process. It said, "To conflate the two is simply wrong because role eliminations reflect the business needs for a specific type of position. That's unrelated to our performance management process which is in place to help individual employees who need support to meet expectations." Amazon documents reviewed by the press did not show how many PIP employees were among those laid off.