Jassy explained: “If you grow as fast as we did for several years, the size of businesses, the number of people, the number of locations, the types of businesses you’re in, you end up with a lot more people than what you had before, and you end up with a lot more layers. And when that happens, sometimes without realizing, you can weaken the ownership of the people that you have who are doing the actual work.”
Mohan Mulund, a former Amazon director of product management who is now managing director of investment firm Vangal, said that he has been in touch with current AWS employees who have expressed worries about being laid off.
Mulund said that Jassy is correct that the layoffs are being fueled by culture, but it’s not quite the culture that Jassy described. Mulund said the issue is that Amazon, along with every hyperscaler, hired a lot of people in 2020 and 2021 and paid them better than many existing employees in identical roles.
“Amazon believes in having lifers,” Mulund said, referring to employees who have been at the company for more than 15 years. “They see people making more [than they do] and they are upset.”
Mulund offered the example of a Level 8 director at Amazon. Even though a typical manager at that level is making about $700K annually, many of the Level 8 managers brought onboard during the hiring boom are taking home $1 million per year. “That creates resentment,” he said.
Mulund said that Amazon is not exactly targeting those more highly compensated people; they are laying off employees whose performance is ranked poorly. But, he stressed, the more an employee is paid, the higher the expectations. That means that the layoffs will inevitably impact more of the higher-paid people, which should dilute the resentment.
