In a massive shake-up that will restructure its corporate workforce, Amazon has delivered a blunt announcement to about 350,000 corporate employees: move to one of the company’s three US hub metropolises or be terminated with no severance.
This type of directive, affecting some 30% of Amazon’s global corporate employees, is among the most widespread Return to Office (RTO) requirements imposed by a tech force up until now.
According to reports, the e-commerce leviathan is compelling corporate employees to re-locate to one of Amazon’s 18 so-called “key hub cities,” among them Seattle, Arlington (Va.) and Washington, D.C. The company says that the move is motivated by a broader strategic rethink of how to enhance collaboration, innovation and productivity that it says have few benefited in the remote work era.
An Amazon spokesman said, “There are a few teams who’ve been working on this for over a year to get colleagues closer together so they can take a new solution to a customer need.” The spokesman added that such efforts varied by team and aren’t “one-size-fits-all,” but that the company typically will support moving employees when necessary.
But it’s a move that has sparked concern, criticism and backlash among employees and industry watchers. According to NPR, workers are being notified of the requirement in one-on-one meetings, as well as in town halls, and frequently are given only 30 days to decide, and then an additional 60 days to either start relocating or quit. The most controversial part may be the lack of a severance package for those who can’t or won’t move, in effect presenting thousands with the same tough decision.
Nonetheless, this policy is particularly harmful to professionals who are mid-career and also have established family life, as well as school-age children -and spouses, with their own careers- the move from coast to coast is a very large personal and financial burden.
Critics believe this is a strategic means for Amazon to cut the headcount without the expenses associated with actual layoffs. And it further follows layoffs earlier and warnings from CEO Andy Jassy that AI integration will mean a smaller corporate staff in the future.
And although proximity is key for Amazon as it tries to compete in a cutthroat industry and build a more efficient, higher-performing culture, there are some big implications now about employee morale, retention, and the company’s talent pipeline, long-term. It is yet to be seen how the epic rehiring of corporate employees will affect Amazon as an employer brand and its attractiveness as a place to work relative to the rest of tech (which is now more competitive than ever).