Amazon's corporate employees will be paid up to 50% less in 2023 because of its falling stock price, report says

• Amazon corporate employees will be paid up to 50% less in 2023 due to its falling share price, the WSJ reported.
• Amazon's pay packets rely heavily on stock awards, making them vulnerable to price fluctuations.
• The tech giant is laying off 18,000 employees, its largest ever job cuts, amid weakening economic conditions.

Some Amazon corporate employees will be be paid as much as 50% less than previously expected in 2023 because of the company's falling stock price, the Wall Street Journal reported on Monday.

Salaries this year are likely 15% to 50% lower than the estimations given to Amazon staff, people familiar with the matter told the Journal. Employees' annual salaries are generally made up of cash compensation and awards of restricted stock units, but because of the 35% decline in Amazon's stock this year, total compensation is set to drop sharply.

Amazon's stock price has fallen from around $150 per share in February 2022, to around $97 per share as of Tuesday, a drop of $53, or 35%, Markets Insider data shows.

Stock units are issued to staff on the basis that the company's share price will increase around 15% every year, sources told the Journal. The sources added that expectations were that the company's share price would be around $170 this year, rather than the $97 where it currently trades.

In a statement sent to Insider, an Amazon spokesperson said: "Our compensation model is intended to encourage employees to think like owners, which is why it connects total compensation to the company's long-term performance.

"That model comes with some year-to-year upside and risk because the stock price can fluctuate, but historically at Amazon, it's had a history of working out very well for people who've taken a long-term view."

In an internal meeting last week, CEO Andy Jassy said Amazon is contending with "a very uncertain economic environment," Insider's Eugene Kim reported, citing a leaked recording.

Like many tech firms, Amazon has recently enacted sweeping layoffs, announcing plans to lay off 18,000 people — the largest job cut in its history. Firms including Meta, Google, and Twitter have all cut thousands of staff amid economic headwinds and over-hiring during the COVID pandemic.

Amazon's decreasing stock price reflects a wider economic slowdown, as well as slowing growth in its retail business. The company cut back hiring targets for its retail business by 7% last year amid decreasing consumer demand.

Early last year, Amazon said it would more than double a cap on base salaries to $350,000 after facing increasing attrition among senior employees.

Later in the year, some staff discovered that a software error resulted in their pay packages being overstated as they relied on older and higher prices for Amazon shares.