The High Cost of Treating Workers Worse than Robots: Employee Attrition Costs Amazon $8 Billion Annually

Amazon’s turnover rate is extremely high and it costs the company $8 billion annually, according to leaked documents.

The leaked Amazon documents, obtained by Engadget, “paint a bleak picture of Amazon’s ability to retain employees, and how the current strategy may be financially harmful to the organization as a whole,” the report notes.

“[Worldwide] Consumer Field Operations is experiencing high levels of attrition (regretted and unregretted) across all levels, totaling an estimated $8 billion annually for Amazon and its shareholders,” internal documents labeled “Amazon Confidential” state.

“Regretted attrition” refers to employees choosing to leave the company. It occurs twice as often as “unregretted attrition” — meaning employees being laid off or fired — “across all levels and businesses,” according to the documents.

The research goes on to state that data from 2021 “indicates regretted attrition [represents] a low of 69.5% to a high of 81.3% across all levels (Tier 1 through Level 10 employees) suggesting a distinct retention issue.”

Tier 1 refers to entry-level roles, such as Amazon’s huge army of warehouse associates, Meanwhile, a vice president would be considered to be at a Tier 10 level. The documents also note that “only one out of three new hires in 2021” stay with the company for 90 or more days.

The documents even criticize Amazon for not tracking employees in an effort to promote them, an ironic flaw for the e-commerce giant, which reportedly uses an intrusive tracking app to monitor and discipline delivery drivers.

The report also notes an investigation from the New York Times, which found that Amazon’s turnover among hourly employees was about 150 percent annually. Meanwhile, the Wall Street Journal and National Employment Law Project say the company’s turnover is around 100 percent in warehouses. This figure is double the industry average.

“The primary reason exempt leaders are resigning is due to career development and promotions,” one document reads.

The Times report also noted that Amazon “intentionally limited upward mobility for hourly workers,” David Niekerk, a former Amazon HR Vice President, said.

As for entry-level employees who are able to get ahead at the company, they are reportedly pitted against new college graduates.

Last year, 39 percent of the leaders hired at Amazon were “university graduates with little to no work nor people leadership experience,” while only four percent of warehouse process assistants were promoted to area managers, the report notes.

While Amazon deals with high turnover, the company is also facing walkouts, strikes, and the unionizing of its warehouses as employees demand better pay, fair treatment, and an end to retaliatory behavior.

You can follow Alana Mastrangelo on Facebook and Twitter at @ARmastrangelo, and on Instagram.