There's been a lot of debate around Amazon's hiring practices, particularly given the conflicting data and statements from the company. A core issue seems to be that Amazon has alienated a significant portion of its domestic engineering talent pool. Many experienced engineers have left, and others seem unwilling to return, even when offered higher-level roles. I personally was an L7 engineer and turned down a boomerang offer.
In response, Amazon appears to be increasingly turning to H-1B workers - especially from countries where the company’s reputation hasn't soured as much.
While these engineers may be less experienced, they're often more willing to accept lower compensation, due in part to discrepancies in wage data reported by the Department of Labor. For example, the BLS wage data, which sets a $115k cap for certain wage codes, has led to a misalignment in what’s considered a "fair wage" enabling companies like Amazon to pay these workers below actual market rates.
This reliance on overseas talent seems to be more than just a cost-saving measure; it also reflects Amazon's ongoing struggle with high turnover among its U.S. engineering staff. The company’s well-documented high attrition rates, as highlighted in reports like this one from Forbes - https://www.forbes.com/sites/edwardsegal/2022/10/24/amazon-r... - shed light on the challenges Amazon faces in retaining domestic engineers.
The LinkedIn data also supports this trend.
Candidly, it seems that Amazon has burned too many bridges with U.S.-based engineers, forcing the company to increasingly rely on a less experienced labor pool from abroad in order to maintain its operations, despite being an American based, publicly traded company.
From my understanding, the last budget bill passed (called the big beautiful bill by some) had changes to section 174. Specifically that software R&D could once again be immediately fully expensed in the year incurred rather than amortized over several years SO LONG AS its a US based expense. Non US based R&D expenses still need to be amortized, and over an ugly 15 year period.
What significant changes to section 174 were made in the big beautiful bill?
Key Changes
The bill created a new Section 174A that restores immediate deductibility for domestic research and experimental (R&E) expenditures, largely reversing the Tax Cuts and Jobs Act requirement that had forced companies to capitalize and amortize all R&E expenses starting in 2022.
Domestic vs. Foreign Treatment:
Starting with tax years beginning after December 31, 2024, businesses may immediately deduct domestic R&E expenditures in the year they are paid or incurred
Foreign R&E expenditures must continue to be capitalized and amortized over 15 years under the original Section 174
Retroactive Relief Options:
The new rules permit taxpayers to deduct previously capitalized and unamortized domestic R&E expenditures over a one- or two-year period, and small businesses may opt to apply new Section 174A going back to 2022 and file amended returns. Eligible small business taxpayers (generally those with average annual gross receipts during the preceding three years not exceeding $31 million) can retroactively expense R&E expenditures for taxable years beginning after December 31, 2021, by filing amended returns.
Alternative Treatment: Taxpayers may still elect to capitalize and amortize domestic R&E expenditures over a period of not less than 60 months, or elect to amortize them over a 10-year period.
This represents a major win for businesses conducting research and development, as the 2022-2024 capitalization requirement had created significant tax burdens and compliance complexity.
I'm not so sure.. many years of capitalized R&D expenses would eventually compound such that you would find a steady state. And in general all we're talking about here is whether or not a company is profitable and hence is taxed.. most of these companies make sure to spend almost all of what they make to avoid being profitable
It's not even H1Bs and not just Amazon. Amazon and most Big Tech companies have been shifting jobs overseas (via hiring freezes in the US and open headcount in India) for almost 4 years now.
But I can tell you with fair certainty that Amazon's high turnover rate is NOT happening in their engineering departments, though. It's happening in their retail or business departments.
I'm kind of horrified by the rise of anti-immigrant rhetoric in engineering circles online and how normalized it's becoming. (Especially troubling how much Indians in particular are drawing ire). Is it really that much different if Amazon brings in a foreign worker to Seattle vs someone from Mississippi? Immigration restrictions are arbitrary and unfair, and in my mind any carveouts for them are a good thing.
> But I can tell you with fair certainty that Amazon's high turnover rate is NOT happening in their engineering departments, though.
Maybe you mean there hasn't been any change in their turnover recently, but the numbers (not to mention, the horror stories) I heard more than a decade ago from then-current and ex-AMZN folks were already pretty bad.
As an illustrative example, IIRC the average tenure is 21 months, which is just 3 months short of their first big RSU chunk (15%?) vesting. That is, people could not bear to stay another 3 months to get a big chunk of equity that they'd worked for the past 21 months.
If people recall that NY Times article about Amazon culture, I had already heard examples of everything in that article and more from people who had left.
> I'm kind of horrified by the rise of anti-immigrant rhetoric in engineering circles online and how normalized it's becoming
Agree, and it came on pretty suddenly as well, which is particularly horrifying. To me it shows how fragile civility and safety is. I see this type of sentiment showing up in the comment sections of YouTube videos on tech or financial topics recently. I think the reality is when people feel their own way of life and chance at becoming rich is at risk, they will search for whatever external risk they can eliminate. And increased competition (from foreign talent) is one such risk.
If it were just that, it would be one thing. But alongside the protectionism, I am seeing a lot of outright racist comments accompanying this backlash against immigrant labor. Like comments that play up stereotypes or worse. As a mild example, I see people saying things like “They can’t fix their own country so they’re coming to ruin ours” or “We don’t need more call center scammers”.
>It’s created artifacts that we’d like to change (e.g., pre-meetings for the pre-meetings for the decision meetings, a longer line of managers feeling like they need to review a topic before it moves forward, owners of initiatives feeling less like they should make recommendations because the decision will be made elsewhere, etc.) [...] So, we’re asking each s-team organization to increase the ratio of individual contributors to managers by at least 15% by the end of Q1 2025. Having fewer managers will remove layers and flatten organizations more than they are today.
Amazon is a meatgrinder on its workforce, but I will give credit where it's due - I think thinning out management is a noble goal and endeavor. If it's true that these layoffs don't impact as many IC roles, it's probably worth calling that out.
(It's just awful convenient that the timing of this is also when everyone is staring down a rough economy)
If the problem is that lower-downs are carrying out extensive planning for meetings where higher-ups are present, the culture issue might not be with the people who are adapting...
> Amazon is a meatgrinder on its workforce, but I will give credit where it's due - I think thinning out management is a noble goal and endeavor. If it's true that these layoffs don't impact as many IC roles, it's probably worth calling that out.
Their filings show that it is still mostly ICs. If you’re doing a cut of 15% of the company (or whatever the number is), that has to include a large number of ICs.
Indeed. It seems like splitting hairs. It says that their upper level management made a lot of bad calls about headcount growth. And, as always, it's the people below the decision makers who pay the price.
> Jassy explained that as Amazon added headcount, locations and lines of business in recent years, “you end up with a lot more people than what you had before, and you end up with a lot more layers … sometimes without realizing it, you can weaken the ownership of the people that you have who are doing the actual work.”
"And here's something else, Bob. I have eight different bosses right now."
"I beg your pardon?"
"Eight bosses."
"Eight?"
"Eight, Bob."
That's a funny way to describe deliberately wasting thousands of work hours screening, interviewing and hiring people they didn't need. It seems like those making these staffing decisions should be the first to go, yet that never seems to be the case.
Correct. CEO's layoff explanation indicates two things.
First, the people who made the hiring decision back then were wrong, since they seemingly hired a lot of people for unneeded roles.
Second, the people in charge now lack the vision or ideas on how to put 14,000 already-trained employees to good use on new projects, new products, etc.
> Amazon says it didn’t cut 14,000 people because of money. It cut them because of ‘culture’
So they're saying Amazon has culture of being assholes to others? I guess at least they're honest about it, and their admission comports with other accounts about how they do business.
> Culture of importing cheaper labor that they can manipulate.
> The H1B program is broken and ripe for abuse.
Offshoring is a much bigger problem. These abusive companies can "save" way more money by exporting the job than importing a worker to fill it, and pandemic-era changes have accelerated that.
Readit News
In response, Amazon appears to be increasingly turning to H-1B workers - especially from countries where the company’s reputation hasn't soured as much.
Example: https://h1bgrader.com/h1b-sponsors/amazon-dot-com-services-l...
While these engineers may be less experienced, they're often more willing to accept lower compensation, due in part to discrepancies in wage data reported by the Department of Labor. For example, the BLS wage data, which sets a $115k cap for certain wage codes, has led to a misalignment in what’s considered a "fair wage" enabling companies like Amazon to pay these workers below actual market rates.
This reliance on overseas talent seems to be more than just a cost-saving measure; it also reflects Amazon's ongoing struggle with high turnover among its U.S. engineering staff. The company’s well-documented high attrition rates, as highlighted in reports like this one from Forbes - https://www.forbes.com/sites/edwardsegal/2022/10/24/amazon-r... - shed light on the challenges Amazon faces in retaining domestic engineers.
The LinkedIn data also supports this trend.
Candidly, it seems that Amazon has burned too many bridges with U.S.-based engineers, forcing the company to increasingly rely on a less experienced labor pool from abroad in order to maintain its operations, despite being an American based, publicly traded company.
What significant changes to section 174 were made in the big beautiful bill?
Key Changes The bill created a new Section 174A that restores immediate deductibility for domestic research and experimental (R&E) expenditures, largely reversing the Tax Cuts and Jobs Act requirement that had forced companies to capitalize and amortize all R&E expenses starting in 2022.
Domestic vs. Foreign Treatment:
Starting with tax years beginning after December 31, 2024, businesses may immediately deduct domestic R&E expenditures in the year they are paid or incurred
Foreign R&E expenditures must continue to be capitalized and amortized over 15 years under the original Section 174
Retroactive Relief Options:
The new rules permit taxpayers to deduct previously capitalized and unamortized domestic R&E expenditures over a one- or two-year period, and small businesses may opt to apply new Section 174A going back to 2022 and file amended returns. Eligible small business taxpayers (generally those with average annual gross receipts during the preceding three years not exceeding $31 million) can retroactively expense R&E expenditures for taxable years beginning after December 31, 2021, by filing amended returns.
Alternative Treatment: Taxpayers may still elect to capitalize and amortize domestic R&E expenditures over a period of not less than 60 months, or elect to amortize them over a 10-year period.
This represents a major win for businesses conducting research and development, as the 2022-2024 capitalization requirement had created significant tax burdens and compliance complexity.
But I can tell you with fair certainty that Amazon's high turnover rate is NOT happening in their engineering departments, though. It's happening in their retail or business departments.
I'm kind of horrified by the rise of anti-immigrant rhetoric in engineering circles online and how normalized it's becoming. (Especially troubling how much Indians in particular are drawing ire). Is it really that much different if Amazon brings in a foreign worker to Seattle vs someone from Mississippi? Immigration restrictions are arbitrary and unfair, and in my mind any carveouts for them are a good thing.
Maybe you mean there hasn't been any change in their turnover recently, but the numbers (not to mention, the horror stories) I heard more than a decade ago from then-current and ex-AMZN folks were already pretty bad.
As an illustrative example, IIRC the average tenure is 21 months, which is just 3 months short of their first big RSU chunk (15%?) vesting. That is, people could not bear to stay another 3 months to get a big chunk of equity that they'd worked for the past 21 months.
If people recall that NY Times article about Amazon culture, I had already heard examples of everything in that article and more from people who had left.
Given how many CS grads in US colleges are struggling to find a job these days, I disagree.
If there is demand beyond what local supply can provide, sure. That may have been the case 10 years ago, but it's not the case today.
in what way do you mean different? i would say it is wildly different
Agree, and it came on pretty suddenly as well, which is particularly horrifying. To me it shows how fragile civility and safety is. I see this type of sentiment showing up in the comment sections of YouTube videos on tech or financial topics recently. I think the reality is when people feel their own way of life and chance at becoming rich is at risk, they will search for whatever external risk they can eliminate. And increased competition (from foreign talent) is one such risk.
If it were just that, it would be one thing. But alongside the protectionism, I am seeing a lot of outright racist comments accompanying this backlash against immigrant labor. Like comments that play up stereotypes or worse. As a mild example, I see people saying things like “They can’t fix their own country so they’re coming to ruin ours” or “We don’t need more call center scammers”.
>It’s created artifacts that we’d like to change (e.g., pre-meetings for the pre-meetings for the decision meetings, a longer line of managers feeling like they need to review a topic before it moves forward, owners of initiatives feeling less like they should make recommendations because the decision will be made elsewhere, etc.) [...] So, we’re asking each s-team organization to increase the ratio of individual contributors to managers by at least 15% by the end of Q1 2025. Having fewer managers will remove layers and flatten organizations more than they are today.
Amazon is a meatgrinder on its workforce, but I will give credit where it's due - I think thinning out management is a noble goal and endeavor. If it's true that these layoffs don't impact as many IC roles, it's probably worth calling that out.
(It's just awful convenient that the timing of this is also when everyone is staring down a rough economy)
https://www.aboutamazon.com/news/company-news/ceo-andy-jassy...
Their filings show that it is still mostly ICs. If you’re doing a cut of 15% of the company (or whatever the number is), that has to include a large number of ICs.
That's a funny way to describe deliberately wasting thousands of work hours screening, interviewing and hiring people they didn't need. It seems like those making these staffing decisions should be the first to go, yet that never seems to be the case.
First, the people who made the hiring decision back then were wrong, since they seemingly hired a lot of people for unneeded roles.
Second, the people in charge now lack the vision or ideas on how to put 14,000 already-trained employees to good use on new projects, new products, etc.
The culture was abysmal. Not because of layers, Andy, but because you decided to do all your announcements in secret on A to Z.
Cowardice.
So they're saying Amazon has culture of being assholes to others? I guess at least they're honest about it, and their admission comports with other accounts about how they do business.
The H1B program is broken and ripe for abuse.
> The H1B program is broken and ripe for abuse.
Offshoring is a much bigger problem. These abusive companies can "save" way more money by exporting the job than importing a worker to fill it, and pandemic-era changes have accelerated that.