Amid cuts that reportedly include some 10,000 jobs, Amazon is said to be offering some employees voluntary buyouts or “voluntary layoffs.”
That’s according to CNBC, which reported Wednesday that according to company messaging, Amazon offered severance and severance packages to some parts of the company on Tuesday and Wednesday.
This week, the company also made layoffs, Amazon confirmed, but would not comment on the number of employees who were laid off.
“As we go through this, given the current macroeconomic environment (as well as several years of rapid hiring), some teams are making adjustments, which in some cases means that certain roles are no longer needed,” said Kelly Nantel, a spokeswoman for Amazon. she told CNN about the confirmed layoffs.
“We do not make these decisions lightly and are working to support employees who may be affected,” he added.
The company did not immediately respond to a request for comment on the reports of voluntary acquisitions.
According to CNBC, Amazon is offering employees severance pay equal to three months’ salary. It includes one week of pay for every six months the employee has been with the company and a stipend paid weekly for three months, theoretically to pay for the maintenance of their health insurance. Employees will have access to the company’s plan until the end of next month, the outlet added.
The offers give employees until November 29 to decide to leave, and are allowed to reverse that decision until December 5. If they accept the purchase, their last day would be December 23.
Amazon’s moves this week come amid further labor losses in technology, which has seen record layoffs in recent months. Meta, for example, laid off some 11,000 employees earlier this month, the first time in its history that it has carried out large-scale layoffs. Both companies faced disappointing earnings reports this year. Amazon shares are down 44% compared to the beginning of the year, and Meta’s are down 67%.
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When companies need to cut costs in a challenging economic environment, voluntary agreements like the one offered by Amazon can have some positive effects, says Margaret Hermes, chief operating officer of Chicago-based financial technology company Avant.
Hermes oversees areas including operations, human resources, and internal company communications. She also has a law degree and was a senior advisor at Groupon.
“A voluntary severance program will allow Amazon to reduce the number of employees [while] at the same time, separating yourself from people who may not have fully agreed with where Amazon is going and were already thinking about leaving,” he says.
But there are downsides. The job market is cooling off, particularly in technology. Those who are offered takeovers may not take on the company even if they want to, making it less likely that they will actually help the company, Hermes adds.
Large-scale layoffs have become more common, at least publicly, in the battered industry. Notably, Twitter laid off half 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 offers 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,” he says.
Finally, business owners need to consider the morale of those left behind, he advises. A key part of that is to make layoffs or separations with humanity and organization.
“If layoffs are not made empathetically, companies run the risk of damaging the morale of the remaining employees. [going forward]”, she advises.