What is the ‘silent layoff’ that Amazon allegedly used to reduce its workforce? – Firstpost

Workplace trends have changed in recent years and range from “quietly quitting” to “grumpily staying put.”

However, “silent layoffs,” “silent terminations,” or “quiet dismissals” may be the worst cases.

E-commerce giant Amazon is accused of allegedly using “silent layoffs” to reduce staff without having to lay off employees and avoid bad publicity.

This means the following:

What is a silent dismissal?

Quiet dismissal is just another term for “silent dismissal”.

In this practice, management creates a work environment with deteriorating conditions—overwork, stalled promotions, little management support—in order to pressure employees to quit rather than fire them.

This is a subtle tactic used by managers to make a job less attractive and encourage employees to leave.

This happens more often with contract or temporary workers without any explanation or apology, so Stellarmann.com.

While this may be common practice in the workplace today, it is neither ethical nor productive or excellent leadership.

Accordingly Gallupit undermines trust within the team, damages your employer's reputation as a positive place to work, and can even make it harder for you to keep customers happy when key employees leave the company.

Why do companies fire employees “quietly”?

This step could save a company costs.

They would no longer be obliged to pay employees severance pay when they leave.

Layoffs can be very costly for companies because employees must receive severance pay if they are fired.

For example, Microsoft suffered a profit loss of $1.2 billion in the second quarter of 2023 due to layoffs and other reorganization initiatives, according to The street.

How to a CNBC Amazon, which has been conducting rolling layoffs since 2022, paid its U.S. employees full pay and benefits for 60 days. During that time, they were paid but did not have to continue working.

Amazon then paid the laid-off employees severance pay, job placement assistance, temporary health insurance, and several weeks of severance pay based on their length of service.

The company saves time and money by firing employees “quietly” instead of going through the entire process.

This was highlighted by John McBride and Justin Garrison, two former Amazon employees with offices in Denver and Los Angeles.

How does Amazon use this to get rid of its employees?

McBride worked for Amazon Web Services (AWS) for one year until June 2023.

He explained that no one who has followed the company for years would have been shocked by CEO Andy Jassy's announcement in a recent post on X.

“Ultimately, it comes down to taxes and the economy,” he said.

The Colorado-based engineer divided Amazon’s alleged plan into five phases:

2. Dismissal of 30,000 employees

3. Compulsory return: Employees had to work two to three days a week in an office near where they live. “I went to the Denver office near me, a 20-minute commute.”

4. Return to the team: This required employees to work from offices where their team was physically based. In McBride's case, this meant moving to another city, Seattle. “Many, many people left during this phase. I personally left in 2023 because I didn't want to move to Seattle,” he said.

5. Silent dismissal: “If you somehow managed to hold out that long, your work life would become incredibly unsatisfying and tedious: you would be excluded from face-to-face meetings, you would be passed over by management, you would not get interesting or meaningful work, etc.”

6. Death of remote work: “Everyone needs to sit at a desk in a physical office where your team is located.”

Robert Lacis also worked for the e-commerce giant for almost five years.

According to his LinkedIn post, Lacis was employed as a “virtual employee,” but after Jassy announced the company was resuming operations, he was given the option of either leaving the company or moving to Seattle to work remotely at the company's headquarters.

“After making a major life decision to move to Lake Oswego, Oregon, for the benefit of my family, moving to Seattle was not a good fit,” he said.

In contrast, Justin Garrison worked as a Senior Developer Advocate at AWS for about four years before being laid off in January of this year. After not working for nearly three months, he left the company.

He had a job, but he had not been assigned work; Amazon had not fired him.

“On September 1, 2024, I was told by my manager and my vice president that my team and an adjacent team were being disbanded. They claimed we had all done such a good job that they wanted us to stay at Amazon. 'We still have a job, just not a role,'” he wrote on his blog.

Garrison repeatedly heard from his management that severance pay would only be considered once all other options had been exhausted.

“They told us our top priority was to find another job. Every job we found had significant drawbacks. Lower pay, lower title, RTO, or various other things. It was clear they wanted us to take another job that we could later quit. My management wanted to maintain headcount but couldn't do layoffs.”

Over the next two and a half months, Garrison received “a variety of excuses” or was ignored when he inquired about the status of his job and severance pay.

“On January 10, I officially left Amazon. My manager called me and asked what work I was doing, as if none of this had ever happened. I knew he was going to try to put me on a PIP (performance improvement plan) and I wasn't going to stay for that,” he said.

How does it help Amazon?

“With spending and balance sheets across the economy currently under great strain,” McBride said, Amazon's decision is an attempt to minimize headcount, avoid a high tax burden and increase profit margins.

The former Amazon employee further explained that while the company receives significant tax breaks in the cities where it has its offices, vacant offices do not provide an incentive for the government to continue allowing the company to operate tax-free.

“If Amazon continued to allow workers to work from home, the tax authorities would come knocking on the door and the company would have to pay hundreds of millions of dollars,” McBride said.

“Ultimately, Amazon's strict return policy is not just about encouraging innovation or collaboration – it is a strategic move driven by macro and microeconomic factors. By consolidating their workforce in physical offices, they aim to maximize tax incentives and reduce operating costs.”

With contributions from agencies