Why Does Amazon Offer Financial Incentive to Its Employees to Resign?

E-commerce giant amazon offers a bonus to its employees, called the 'Pay To Quit' bonus, introduced in 2014, for resigning.

Once a year, the company offers to pay full-time associates at Amazon fulfilment centres a quitting bonus ranging from $2000-$5000.

"Once a year, we offer to pay our associates to quit. The first year the offer is made, it's for $2000. Then it goes up one thousand dollars a year until it reaches $5000."

Amazon's annual letter to shareholders, 2014

The headline on the offer is "Please Don't Take This Offer."

ON ONE CONDITION...

Employees who don't wish to continue their service for Amazon can go ahead and take up this "quitting bonus,"

BUT THE CAVEAT IS THAT THEY CAN NEVER WORK FOR AMAZON AGAIN.

"We hope they don't take the offer; we want them to stay. Why do we make this offer? The goal is to encourage folks to take a moment and think about what they really want.

In the long run, an employee staying somewhere they don't want to be isn't healthy for the employee or the company.

Jeff Bezos said in the letter.

BRAINS BEHIND PTQ

The idea came from Zappos, the online footwear and clothing retailer that Amazon bought in the year 2009.

The Amazon Fulfillment centres iterated on it and launched the program.

NO BONUS ANYMORE

As per media reports, Amazon Paused the 'Pay to Quit program for the majority of its workers for 2022.

Now the offer will be presented only to those that graduated from the Amazon Career Choice Training Program, within 90 days of graduating, claim reports.

THE LABOR CRUNCH

Reportedly, the suspension of the program coincides with a labour crunch in the US that has hit large companies employing supply-chain workers.

Amazon has also been reported to be facing high turnover rates for hourly employees due to burnout.