A Stock Slump At Amazon Is Hurting Employee Pay

Amazon AMZN -2.81% is not just suffering from layoffs but is facing a broad range of challenges. The company's share-price drop is also impacting its employees' pay, forcing the company to reassure its employees that a rebound in its stock price is likely.

A large portion of Amazon's (ticker: AMZN) employee compensation for 2023 will be paid out in restricted stock units, which will leave pay for 2023 between 15% and 50% lower than what was initially forecast, Trade Algo reported citing people familiar with the matter. According to a report by Trade Algo, managers have been told to advise employees to keep their restricted stock until there is a recovery in the company's stock price.  

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The stock of Amazon fell 2.5% on Tuesday to $94.80 after declining 36% over the past year, trading at levels last seen in the first half of 2020.

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Brad Glasser, an Amazon spokesperson, said the company's compensation model encourages employees to think like owners. “In the past, people who have taken a long-term view of a situation have seen it work out very well for them."

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Last year, Amazon raised its highest base salary to $350,000 from $160,000, citing a competitive labor market as the reason for the increase. There are a number of factors that contributed to its historically high stock award weighting when compared to other large technology companies in terms of compensation.

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More than 18,000 jobs will be cut by Amazon this year, or roughly 5% of its corporate workforce, primarily in its devices business, recruiting, and retail.