Amazon (AMZN) – Get Free Report is an e-commerce and cloud computing giant. Its products touch just about everyone on the planet. It ships about 584 million items annually, and Amazon Prime has over 100 million subscribers. The company’s AWS cloud-computing segment owns about 42% of the cloud-computing market, more than any other provider, including Alphabet (GOOGL) – Get Free Report and Microsoft (MSFT) – Get Free Report.
Amazon has enjoyed tremendous success since CEO Jeff Bezos founded it in 1994. However, it has also endured controversies, including criticism over long hours with inadequate breaks for its warehouse and delivery workers.
Recently, Amazon doubled down on a workplace policy that could be similarly controversial, and many workers won’t like it.
Amazon takes aim at work-from-home
Amazon’s sheer size means it employs over 1.5 million people, including many highly skilled workers, such as technology workers
To meet surging demand, the company went on a hiring spree during COVID. For example, CEO Andy Jassy announced plans to hire 55,000 corporate and technology workers in September 2021.
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Since then, it’s been a different story. Worries sales could slip because of a recession led Jassy to switch gears last year.
Last fall, Amazon let go of 10,000 workers. In January 2023, Amazon announced it would eliminate 18,000 workers. In March, it issued pink slips to another 9,000 employees.
Amazon’s decision to reduce its headcount to cut costs has likely worried workers. However, cost savings are pumping up Amazon’s bottom line. In the second quarter, earnings skyrocketed 425% year-over-year to $0.65 per share.
The company’s improving profitability this year has been a boon for Amazon’s stock, given its shares have risen more than 65% this year.
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Those gains make shareholders happy, but fewer workers may slow Amazon’s efforts to roll out new features. That could be particularly problematic now, given the surging interest in artificial intelligence. For example, Amazon announced in June it would invest $100 million to help corporate technology customers develop generative AI solutions.
A heavier workload could be why Jassy doubled down on policies requiring workers to return to the office this month.
In February, Jassy laid out plans to have workers return to the office at least three times per week.
“It’s easier to learn, model, practice, and strengthen our culture when we’re in the office together most of the time and surrounded by our colleagues,” Jassy said at the time.
Jassy also said collaboration and learning are enhanced by in-person work.
This month, he delivered a stern warning for employees to return to the office.
“‘It’s probably not going to work out,” said Jassy of workers who refused to work from the office three times weekly. “It’s past the time to disagree and commit…we are going back to the office at least three days a week.”
Jassy’s message suggests those who disagree with its new workplace policy might need to touch up their resumes. In May, 30,000 employees signed a petition opposing the return-to-work change.
That hard-nosed take will likely alienate some workers hired since the start of the COVID pandemic. In 2021, work-from-home employment, including hybrid work, became an important hiring incentive across the technology industry.
Amazon isn’t the only one of these companies having a change of heart about remote work. Meta Platforms (META) – Get Free Report, Facebook and Instagram’s parent company, and Alphabet have also shifted to a 3-times weekly in-office policy.
Last year, Elon Musk banned remote work after he acquired Twitter.
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