Amazon.com Inc (AMZN.O) announced plans to reduce employee stock awards, a key component of its compensation strategy, as the e-commerce giant navigates the challenges of an uncertain economy. The company confirmed that it would reduce RSU (restricted stock units) awards in the final outlook year by a small amount, but did not specify which period this pertained to. This news arrives on the heels of Amazon’s second round of mass layoffs, which added to the wave of job cuts sweeping the technology sector as companies strive to adapt to a tough economic climate.
Business Insider initially reported on the planned change in Amazon’s pay structure, revealing that the company would reassess 2025 compensation in the first quarter of next year in order to “plan for stock variation.” An Amazon spokesperson further explained that the company was considering adjusting its compensation model in the future to strike a better balance between base cash compensation and equity. This decision is influenced by the uncertain economic environment and the company’s compensation budget.
Despite the challenges faced by the company, Amazon’s shares have experienced a significant uptick this year, gaining more than 20% in value. This follows a nearly 50% drop in 2022, highlighting the volatile nature of the market and the importance of businesses remaining agile and adaptive in the face of uncertainty.