Amazon hires thousands of workers just to fire them: why they do it

Amazon has a goal of getting rid of a certain percentage of employees each year, and three managers said Business Insiderthat they felt pressured to achieve this goal: they hired people to fire them.

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"We may hire people we know we're going to fire just to protect the rest of the team," one manager told Insider.

This practice is informally called "hiring to fire," where managers hire people inside or outside the company whom they intend to fire within a year, simply to meet their annual turnover goal. This is called “unplanned churn” (URA). A manager's URA target is the percentage of employees the company would be willing to let go anyway.

In a statement to Insider, an Amazon spokesman denied that the company hired employees with intent to fire them, and said it did not use the phrase "hire to fire."

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But the existence of this practice, at least in some parts of the company, illustrates how Amazon's system of requiring managers to meet their churn target each year can foster conflicting norms and practices.

According to internal documents obtained by Insider, Amazon's most senior executives, including new CEO Andy Yassi, are keeping a close eye on their URA targets. Yassi, for example, is expected to replace 6% of his division through “unplanned” layoffs, which appears to occur annually.

Managers are pressured to try to achieve these goals one way or another. Amazon Web Services (AWS) teams that missed URA goals in 2020 were expected to make up the difference in 2021, according to a memo previously published by Insider. URA's target is 5%, next year it will need to get rid of 7% of employees. The document did not address teams that exceeded layoff targets.

This internal memo also directed AWS managers to include twice the number of employees they wanted to get rid of in a productivity training plan called Focus. An Amazon spokesman said the company has no primary goals for how many employees should be included in the Focus.

Focus appears to be a strategy by Amazon managers to get rid of enough employees to achieve the URA goal. The insider previously reported that those on the Focus plan are often faced with unrealistic goals and vague expectations. Those who fail at Focus end up in the next stage of the performance plan, called Pivot, which can lead to them leaving the company.

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Amazon employees told Insider that the performance appraisal process gives managers too much control over their careers. Managers can include any of their employees in the Focus plan, which prevents them from applying for other positions in the company. And leaving the plan is difficult, which can lead to voluntary resignation or dismissal from the company.

“It takes a team to hire someone, but it takes one bad manager to fire someone,” one employee previously told Insider.

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