Amazon clawed back raises for some recently promoted corporate employees after discovering an internal glitch made the pay packages more lucrative than they should have been.
Amazon brass gave managers the bad news in a Thursday email obtained by Insider. The managers were told that the impacted employees received larger bonuses than they should have because the payouts were erroneously calculated based on outdated Amazon stock prices.
It’s unclear how many Amazon employees are receiving less money than they initially expected following the promotions. But an internal IT ticket related to the software glitch suggested that about 40% of workers promoted in the current quarter have “been impacted by this issue,” according to Insider.
When reached for comment, Amazon spokesperson Brad Glasser confirmed the incident had occurred.
“We identified and immediately corrected an issue with some newly promoted employees’ compensation communications,” Glasser said in a statement. “We are working with employees to ensure they understand their updated compensation.”
Shares of Amazon are down nearly 33% since the start of the year – a decline that roughly matches that of the Nasdaq composite index over the same period. High-cap tech stocks have struggled this year during Federal Reserve rate hikes and recession fears hammer the sector.
In the email to managers, Amazon acknowledged that due to the recent stock slump and the glitch, “it is likely that the promotional cash value your employee will now receive is lower than you originally discussed with them.”
“We recognize that this is an uncomfortable conversation to have,” the email said.
The glitch occurred as Amazon and other tech companies attempt to navigate a worsening financial outlook after share prices boomed during the COVID-19 pandemic.
Amazon CEO Andy Jassy recently indicated the company would continue to hire, but at a much slower pace than it has over the last few years.
“I don’t think that you’ll see us hiring at the same rates that we did,” Jassy said during an appearance at Code Conference earlier this month, according to the Wall Street Journal. “But we’ll be hiring.”