back to article Jeff Bezos reveals Amazon's brutal scale in annual letter

Amazon's mercurial chief executive Jeff Bezos is equal parts John D Rockefeller and Henry Ford, judging by his annual letter to shareholders. In the letter, which was published on Thursday, Bezos took investors "on a tour that samples a small subset of [Amazon's] various initiatives". What this makes clear is that Amazon is …

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I wonder if all those warehouse people think about this in middle of August?

Quote: "In a quirk, Bezos also said Amazon offers employees money to leave the company, a program called Pay to Quit, modeled after a similar program at Zappos. Once a year, the company offers $2,000 to quit, adding $1,000 a year, up to a maximum of $5,000."

http://www.aol.com/article/2014/04/10/bezos-offers-update-on-groceries-drones/20867249/?icid=maing-grid7%7Cmain5%7Cdl28%7Csec1_lnk2%26pLid%3D463405

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Re: I wonder if all those warehouse people think about this in middle of August?

There's a nasty little loop in there some where. Hrm. Work for 5 years, cash out, and apply for a new position...

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Anonymous Coward

Re: I wonder if all those warehouse people think about this in middle of August?

They also pay 95% of the cost of training courses for in-demand jobs like nurse or airplane mechanic - whether it's of any use to Amazon or not.

Sounds decent to me.

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Re: I wonder if all those warehouse people think about this in middle of August?

> Amazon offers employees money to leave the company

That is an extremely odd policy. Why would a company want to lose its most loyal and experienced workers?

I've only seen schemes like this in a) companies trying to downsize without triggering labor laws and/or union anger, and b) one consultancy firm, in which each year every employee was reviewed and either promoted to a more senior position OR offered severance pay, and employees who failed to advance two years in a row were fired (that consultancy firm bankrupted; it turned out that policy didn't produce a star workforce full of the best of the best, it produced a toxic workplace full of sociopaths who spent more time backstabbing each other than working).

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Re: I wonder if all those warehouse people think about this in middle of August?

> That is an extremely odd policy. Why would a company want to lose its most loyal and experienced workers?

Reduces the liability for long-term employee benefits and potential redundancy costs?

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Re: I wonder if all those warehouse people think about this in middle of August?

> Reduces the liability for long-term employee benefits and potential redundancy costs?

The McDonald's approach. Yeah, that seems a likely explanation if we're talking unqualified jobs which require little or no training.

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Re: I wonder if all those warehouse people think about this in middle of August?

> That is an extremely odd policy. Why would a company want to lose its most >loyal and experienced workers?

They don't. Why would the most loyal and experienced workers take the deal? If they are, they don't. And if they do, they aren't. It's like the polar opposite of a unionized environment. Unlike this reply, I think it's brilliant.

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Re: I wonder if all those warehouse people think about this in middle of August?

"That is an extremely odd policy. Why would a company want to lose its most loyal and experienced workers?"

It could have something going for it. If someone is willing to leave for a few thousand, it's pretty clear that they don't want to be there. It's an employee who doesn't much care about their job and the company is better off paying them to go away and then hiring a replacement whose (hopefully) more motivated.

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Anonymous Coward

Re: I wonder if all those warehouse people think about this in middle of August?

Agree, have those wash out programs like the consultancy you mention ever worked anywhere? They were the brainchild of Jack Welch, former CEO of GE, in which he fired the "bottom 10%" every year and was copied at a number of other companies. The problems are that 1) how do you define the "bottom 10%"... it usually is subjective and devolves into a popularity contest. Actually often getting rid of employees who are trying to fix things and ruffling feathers. 2) The turn over costs are ridiculously large. Not only severance for the people leaving, but the hiring and training costs of the new people. It also causes people not in the "bottom 10%" to leave for fear that they could be in the bottom 10% so the turn over is much larger than 10%. 3) Who wants to work in that environment, even if you are a top performer? If there are huge monetary rewards for being a top performer, maybe... but most of the time there is only stick and no carrot.

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Anonymous Coward

No mention of tax?

But then I suppose there's no entry in the company's accounts for that either.

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They are the experts, but I have to wonder about the health of Amazon's main business of a few years ago.

They used to be the low-cost supplier of physical books, and had good prices on many consumer goods. Combined with free shipping over a low threshold and avoiding tax, they were a really good choice of price-aware consumers .

I seem to have figured this out just a little too late. Over the past two years much of the advantage has gone away.

I joined Amazon Prime just before they started charging tax and switching items to the new "Add On" category where free shipping doesn't apply. Items that are still available with Prime shipping have been marked up, often well over retail, to include shipping cost.

Subscribe & Save is another part of the Amazon shopping that is becoming annoying rather than helpful. It's pretty much rolling the dice with prices. In exchange for saving 5% (sometimes 15% or 20%), it means you agree to whatever price they pick on the day they ship. I've had prices more than double between shipments, with no notice. Things that still have an especially good price are frequently "out of stock" -- I just had my entire April shipment canceled because of this, But other times they don't hesitate to consider a smaller package as the same product.

Bottom line is that I see Amazon has an amazing, broad business. But the consumer-facing part is inconsistent and unpredictable. The result is that there is a lot less brand loyalty there than with most businesses, and that could result in a crisis with any misstep.

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Devil

One thing I love about Amazon operating separate national websites in Europe...

...is multilingual shopping around. The websites might separate but the backend logistics isn't. Find a product you want and then check if the price (after currency conversion and conversion fees) works out cheaper on amazon.de/.es/.fr. I bought a fancy monitor off amazon.es and it was shipped from *drumroll* Milton Keynes.

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Are you sure it's Amazon

First, you can hardly fault Amazon for the sales tax bit, because to say they resisted the change would be a huge understatement. It hurt them just as much as it hurt you, I'm sure. Somebody correct me if I'm wrong, but I think we can thank the state of California for that one.

Beyond that, are you sure it's Amazon that changed? You said they used to be a good choice for the price-aware consumer, but go on to describe issues the price-aware consumer would tend to avoid (being price-ware and all).

It sounds to me like somewhere along the line you went from price-aware consumer to just plain old consumer. Not that I blame you...

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They need to buy a company with good customer service, their "customer service" and communication system totally sucks.

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Walmart isn't exactly a traditional retailer - poor comparison

For about the last 20 years, Walmart has been more about shifting inventory and now has a shared private b2b cloud with most of its major suppliers to optimise this. Even old Sam Walton himself took this view - here's a quote of his:

"“People think we got big by putting big stores in small towns. Really we got big by replacing Inventory with Information.”

He was doing the Amazon thing for groceries long before Amazon with the first terabyte-scale retail/supply/logistics database in the mid 90s.

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Anonymous Coward

Profit

At some point you would think that the investors would get tired of all this "gee whiz" stuff and ask Bezos to start making profits. I suppose as long as he can keep growing at a rapid pace, they will assume he will figure out how to make money later.

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