Late last year, as Amazon’s stock price crested $2,000 per share, a tech worker named Judy (not her real name) at the company’s Seattle headquarters was given an ultimatum by her manager: get up to speed or take a payout and leave.
Incredulous, she marched over to human resources with a stack of glowing performance reviews and emails from her manager that painted a different picture. HR agreed and allowed her to switch teams.
The experience left her shaken and fearful of losing her seat, so after a recent surgery Judy pushed herself to be back in the office within a week’s time. She was greeted with another ultimatum.
This time, there was no explanation for the improvement plan, and if a friend hadn’t told her about protections under the Family and Medical Leave Act, she likely wouldn’t have confronted HR. “They admitted right away there was an FMLA violation, so they offered me more severance than normal to leave,” she said.
Exhausted and disillusioned, she took the severance package and signed an agreement promising she wouldn’t sue Amazon.
Like thousands of tech workers at Amazon’s Seattle headquarters, Judy was managed out through an experimental management program at Amazon. (Amazon disputed this estimate and told The Daily Beast those workers number in the hundreds.)
That program, known as Pivot, gives employees accused of underperforming a choice between leaving voluntarily or signing onto a rigorous work improvement plan to test their mettle. It’s a critical piece of the toolkit the company’s management uses to wield power over its workers.
Amazon managers have routinely used Pivot as a weapon to edge out employees for a slew of reasons unrelated to low performance—some of them potentially illegal—according to current and former employees and employment lawyers familiar with the program. And recent changes to Pivot’s appeal process may have further eroded workers’ chances of a fair hearing.
An Amazon spokesperson said the Pivot program was created to provide a “fair and transparent process for employees who need support in their job,” while providing them choices about next steps in their career.
“Amazon has always had a high bar for performance—it’s one of the things that makes Amazon an attractive place to work. The vast majority of employees meet or exceed that high bar. In a workforce of over 650,000 people, there will be some individuals with ongoing performance challenges, and we work with these employees to help them meet the performance bar before determining if Amazon is the right place for them,” the spokesperson said.
Unveiled in early 2017, a year-and-a-half after a New York Times exposé spotlighted Amazon’s aggressive white collar work culture, Pivot was an attempt to humanize the company’s “stack ranking” review process. In stack ranking systems, managers sort workers from best to worst, a practice that inevitably puts some employees at the bottom of the heap. At Amazon, that process encouraged managers to continually grade their subordinates and relegate those at the bottom of the stack to Sisyphean performance improvement plans, known as PIPs.
Speaking with The Daily Beast, an Amazon spokesperson denied that the company has used stack ranking, adding that an annual review is based on “a combination of feedback from peers and performance metrics and does not require managers to rank employees."
With Pivot, Amazon appeared to throw a lifeline to employees at risk of losing their jobs after receiving a low ranking. Initially, the program offered three options: appeal their placement in the program before a teleconference jury of three coworkers, part ways with a severance package, or spend several weeks trying to pass the PIP with coaching from “Career Ambassadors.”
While PIPs and severance packages are relatively common at big tech companies and corporate America in general, the scale of their use and the teleconference appeal process of Pivot is “100 percent unique to Amazon,” said Timothy Emery, an employment lawyer at Seattle-based Emery Reddy PLLC who has counseled clients facing Pivot.
The unique program has enabled Amazon to reduce legal liability and in turn head off litigation costs, all with the veneer of fairness, he said.
“The severance buys them a complete release, which is another problem because it buys them a release of FMLA, the Americans with Disabilities Act, and other liabilities the person can sue them for,” Emery added.
Those concerns are heightened as multiple sources warn of possible staffing cuts in Seattle following a long stretch of hiring that has swelled the corporate headcount there to more than 45,000.
A spokesperson said Amazon has no requirement for individual managers to let a certain number of employees go and the company has more than 10,000 job openings in Seattle.
Software developer Oleg Churyumov was labeled a low performer and placed in Pivot shortly after complaining to HR that he believed his manager was discriminating against him based on his Russian heritage. When Churyumov raised suspicions that the PIP was retaliation for his allegation, HR said he could appeal his placement in the program, but he would only be able to contest performance issues—his discrimination and retaliation claims would be handled in a separate investigation, according to Churyumov’s email communications with HR.
A few weeks later, that investigation found that while Churyumov’s manager may have singled him out for more work and fewer privileges than other team members, there was no breach of Amazon policy, according to the investigator’s high-level findings. Amazon said the company tried to work with Churyumov to resolve the complaints, but the conversations were unproductive.
Simply taking a payout and moving on from Amazon wasn’t an option for Churyumov, whose work visa was contingent on his employment at the company.
With no recourse inside Amazon, Churyumov’s mental health spiraled and he attempted suicide last July. After nearly a year on medical leave, he was fired two weeks ago.
Amazon said that he was provided with options and support, but instead chose to be on leave.
Churyumov’s pushback is rare among Amazon-sponsored foreign employees, according to another software developer who recently left the company after being placed on a performance improvement plan.
“Americans and green card holders can speak up against bad work practices since we aren’t threatened by losing our visas,” he said.
Before having their case escalated to a PIP, some employees are placed on less formalized performance review tracks, including "dev plans.” They’re considered the lucky ones, but only if they discover their probationary status from a helpful colleague or a generous manager. In some cases, managers secretly place workers on development plans as a way to gather evidence for a PIP.
Like employees facing a PIP, those placed on development plans are barred from switching teams during the probationary period. The only way around that is if a vice president from a receiving team signs off on the transfer of someone on a development plan.
“If you’re not getting along with a manager, you have to transfer before they put you on a dev plan,” said an employee who passed one and switched teams. The paranoia of being managed out creates an atmosphere of musical chairs on some teams in which people are constantly coming and going, she said.
Amazon quietly modified the Pivot program in April, eliminating the upfront option to appeal being placed in the program. Instead, employees now face two choices: severance or PIP. Those who opt for the latter and fail can either take a reduced payout or appeal the decision with the caveat that failed appeals receive a further reduced severance.
An Amazon spokesperson said the recent changes, which include having an additional manager sign off on requests to put someone in Pivot, are “improvements” to the program based on “feedback and learnings.”
Daniel Kalish, an employment lawyer in the Seattle office of HKM Employment Attorneys LLP who has walked clients through the Pivot process, disagrees. “I am very concerned if you are only allowed to appeal whether or not you satisfied their performance improvement plan, especially in light of the fact that most performance improvement plans in my view are an effort to make it impossible for an employee to achieve it,” he said.
Kalish sees Pivot in general and the changes to the appeal process in particular as clever ways to stack the odds against an employee targeted for firing.
“In my world it’s called papering a termination,” he said. “Look, they want to fire someone, they’re nervous that someone may consider it illegal, so they paper it, they start writing down when someone comes in a few minutes late, and say, ‘look they didn’t improve so we fired them.’ They’re kind of setting up their case to the jury or to the judge ahead of time.”
Every employee who accepts a severance package must sign an agreement promising not to sue Amazon. And every employee who fails a performance plan or takes a payout can never work at the company again.
A potential upside of the new process is that it could discourage managers from designing impossible improvement plans because they may be scrutinized in the appeal process. Defending its appeals system, an Amazon spokesperson told The Daily Beast that workers who win an appeal are paired with an advisor who can help them move to a team with a “high-performing manager."
But the three-person appeal panels, conducted by teleconference, are skewed in Amazon’s favor according to Emery, the Seattle lawyer.
“The people who are signing up to judge their peers are Amabots—they’re more often than not going to side with Amazon.”
“If Amazon wants to move closer to fairness, they’ll stop fighting efforts to unionize. The union grievance process is a far better system than Pivot,” he added.