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Highlights
- Amazon Inc. announces its decision to more than double the maximum base salary it pays to its employees to US$350,000.
- In its fourth-quarter results announced last week, Amazon revealed that its net sales increased 9% to US$137.4 billion and net income increased to US$14.3 billion in the fourth quarter.
- In its first-quarter 2022 Guidance, Amazon expects its net sales to grow between 3% and 8% compared with the first quarter of 2021.
In a big cheer to its employees, e-commerce giant Amazon Inc. has announced its decision to more than double the maximum base salary it pays employees to US$350,000 from US$160,000.
On Monday, the company was quoted saying that it has decided to make more significant increases to its compensation levels than in a typical year. In view of the growing competitive labor market over the past year, as per sources, the company has reached the decision by doing a detailed analysis of diverse options, mulling the economics of its business and the need to remain competitive for enticing and retaining top talent.
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Great Resignation amidst Corona-era
A survey report revealed that an all-time high, 4.5 million Americans voluntarily left their jobs in November last year. Since the onset of the pandemic, global labour shortages have left companies across the world in a challenging situation. This has birthed the Great Resignation, as workers leave jobs in striking numbers and a lack of migration because of travel curbs.
Amidst this, companies globally are trying their best to retain their workforce and hire the best talents. Last year, Amazon announced its decision to provide an average starting pay of more than US$18 per hour in the US.
However, lately, the world’s largest online retailer has struggled to hire and retain workers. Amazon has long depended on stock awards, staking it can lure workers even when the base pay is low. However, the stock languished in 2021, gaining around 2.4% while the S&P 500 jumped 27%, and the strategy started losing its attraction. Media reports suggest that the turnover rate inside Amazon has reached crisis levels.
Amazon increases the cost of its Prime membership
Investors have kept their eyes on Amazon’s increasing costs primarily after the company reported a robust fourth quarter earlier this month and said that it would increase the price of a Prime membership in the United States, with the monthly fee going up from US$12.99 to US$14.99, and the annual membership from US$119 to US$139.
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Amazon revealed that in the fourth quarter its net sales increased 9% to US$137.4 billion and net income increased to US$14.3 billion or US$27.75 per diluted share in the fourth quarter, against the prior corresponding period.
Benefits Amazon provides to its employees:
Amazon now employs over 1.6 million people globally and continues to invest in offering industry-leading pay and benefits. This includes comprehensive benefits for full-time employees. These benefits include health, vision, and dental insurance; a 401(k) with 50% company match; around 20 weeks paid parental leave; and Amazon’s Career Choice program, whereby the company completely funds the cost of an employee’s college tuition. The company also expanded its incentives for front-line employees to get vaccinated against COVID-19 to include US$40 for boosters.
Amazon’s first-quarter 2022 Guidance:
In its first-quarter 2022 guidance, Amazon anticipates its net sales to grow between 3% and 8% compared with the first quarter of 2021. This guidance anticipates an unfavourable impact of roughly 150 bps from foreign exchange rates.
