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Amazon's Stressed Out Culture Is Burning Out Employees

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A recent profile explores how the work environment of the retail behemoth reflects the founder's notoriously frugal and austere character.

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Good CEOs are not always good people. The ones who we really admire can often be frightening and threatening figures in the office. Anyone who has read the Walter Isaacson biography of Apple (NASDAQ:AAPL) founder Steve Jobs knows that as inspiring as he was to millions, even to those outside of the business community (do people leave candles and flowers in front of any other store when the boss dies?), he was certainly not always fun to work for.

Jeff Bezos, the founder of Amazon (NASDAQ:AMZN), is no different. Businessweek has a long profile of Bezos that explores how the culture at Amazon reflects the founder's notoriously frugal and austere character. For such an admired (if sometimes controversial) company, people don't seem to want to stick around at Amazon. According to the article, which is an excerpt from Brad Stone's new book The Everything Store: Jeff Bezos and the Age of Amazon, the company has very poor employee retention for a huge tech company. Its median employee tenure is just one year. Even Wal-Mart (NYSE:WMT), which is a notoriously bad place to work, has a median 3.3-year tenure. IBM (NYSE:IBM), which Amazon now competes with in enterprise cloud computing, has a 6.4-year tenure.

Based on interviews with friends and associates, Stone paints a picture of a confrontational boss who instills fear in his employees and has little enthusiasm for making anyone besides customers happy, but gets things done.

Here are a few tidbits that point to why so many people burn out at Amazon.

Cryptic, Panic-Attack-Inducing, One-Character Emails

Got a complaint for Amazon? Email the CEO. It's jeff@amazon.com. Bezos will forward it to the right person, adding just a question mark. The recipient has to drop everything and explain him or herself, and that response must percolate up through management right back to the CEO.

No Perks

If you get a job with Amazon, don't expect the sorts of freebies that Google (NASDAQ:GOOG) doles out, like a phone and a free cafeteria.

The magazine article says that in the '90s, Amazon didn't even offer bus passes because Bezos feared that employees would have an excuse to rush to get the last bus every day. Parking near the office costs $220 per month. Amazon picks up the tab, minus $40. Even the vending machines at the office cost money.

Middling Pay

New hires get an industry-average base pay, and a signing bonus spread out over two years. They also receive restricted shares of a sky-high stock that vests over four years, with a bigger payout toward the end of the period.

A huge chunk of the company's staff works in the warehouses, where they make an average total annual compensation of $23,852.

Team Darwinism

Similar to Microsoft's (NASDAQ:MSFT) loathed stack ranking program, management is required to fire the worst performers in any department of 50 or more employees. Workers live in perpetual fear, knowing that they have to compete with their colleagues just to keep their jobs.

Searing Insults

How would you like your boss to ask, "Why are you wasting my life?" at the end of your presentation? Apparently Bezos is capable of some mortifying insults when he is disappointed. The employees who Stone interviewed believe that Bezos lacks empathy, which allows him to ignore the human element of management and make the most rational decisions possible for the company.

Bezos's Frightening Laugh

One former associate of Amazon says that Bezos's laugh sometimes instills fear. He laughs when nothing is funny. He laughs to "punish" people for falling short of his high standards.

This is how the 20-year-old company generates $75 billion in revenue every year, sells us everything that it can put in a box, creates its own e-readers and tablets, streams video, provides support and hosting for a huge chunk of the Web, and even serves the CIA with cloud data storage. But it sure sounds like a stressful place to work.

Twitter: @vincent_trivett
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No positions in stocks mentioned.
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