Amazon to face off with workers, government on staff reduction in India

As Amazon looks to shed staff around the world, it is heading for a showdown with worker and government representatives over its hotly contested Voluntary Separation Program (VSP) in India.

Workers say that the program has not been truly voluntary, but rather a way of enacting layoffs without going through legally sanctioned procedures. On its part, Amazon has said that none of the workers who have left the company in the last few months have been laid off, but rather have participated voluntarily in the VSP.

The company has not revealed the number of workers it says have recently left the company via the VSP.

Meanwhile, the Pune Labor Commission has summoned representatives from Amazon India and the Pune-based Nascent Information Technology Employees Senate (NITES), a workers rights association, to a joint meeting on January 17. Pune is the largest municipal district in the state of Maharashtra, and a major IT hub for the country.

The purpose of the meeting is to discuss “the layoff of workers,” according to a statement issued by G S Shinde, the Pune District assistant labor commissioner.  The notice instructs representatives of Amazon and NITES to be present with necessary documents, records and power of attorney. 

NITES issued a complaint on November 19 with government labor officials, stating that recent staff departures had been conducted illegally. The association had received complaints from more than 60 Amazon employees based in Pune, regarding the VSP.  

“As per procedures laid down under Industrial Dispute Act the employer cannot, without prior permission from the appropriate government [agency], lay off an employee featuring on the muster rolls of the establishment,” said Harpreet Singh Saluja, the president of NITES.

He added that a worker who has served for at least a year of continuous service cannot be laid off unless served a notice three months in advance, and prior permission has been received from the appropriate government agency.

Before laying off employees, employers needs to submit an application along with reasons for the layoffs to the approriate government authority. NITES claims that Amazon did not submit any such application, and so violated labor laws. 

Worker association says Amazon violated labor laws

“Amazon has clearly violated the existing provisions of Indian labor laws, which aim at protecting the worker’s right. The voluntary separation policy implemented was never submitted to the Labour Ministry for review, which is a violation of existing labor laws,” Saluja said.  

“We will continue to fight for the rights of aggrieved employees who were unethically forced to opt for the Voluntary Separation Policy and were laid-off illegally,” he added.  

Saluja says that if the VSP program is deemed illegal, NITES wants Amazon to rehire the employees who left the company via the program.

“When the VSP mail came, there was no clear information provided on how this would impact employees. Also around that time Andy Jassy announced that there would be a mass layoff at Amazon. So employees have either been forced to opt for it or have opted for it under pressure. Hence, if it is illegal they should be rehired,” Saluja said.

In November, Amazon India employees were sent plans for the VSP, urging them to voluntarily resign. Employees who resigned would receive VSP benefits including 22 weeks base pay, plus one week base salary for every six months of service, and medical insurance coverage for six months.

Employees working the L1 to L7 levels — all levels of the company up to top executives — in Amazon’s Experience and Technology team received a notice stating they were eligible for the VSP program. 

Soon after the VSP was launched in November NITES issued a complaint to local labor commission representatives as well as the central government Labour Ministry that the program was being forced on employees as a measure to fire people. At a hearing held in Bangalore on November 23 with the central government’s Labour Ministry, Amazon said it had not laid off any employee involuntarily, but only let go those who opted for its separation program on their own by accepting a severance package. 

Amazon also said that it never forced any employee to volunteer for the program, and  instead advised them to use their own discretion.

However, NITES representatives were unable to attend the meeting, saying that they had received late notice about it. In the wake of that meeting, government representatives agreed that the local labor commission should hold another hearing with both Amazon and worker representatives, and issue a decision on the legality of the VSP employee departures. Under Indian law, either state or central government agencies may decide labor complaints.

Amazon faces worker unrest

The latest hearing in India comes as Amazon faces worker unrest elsewhere. Last week, employees affiliated with the UK’s GMB union in Amazon’s Coventry warehouse announced they would be staging a strike action on Jan. 25, walking out as part of a fight for better pay.

Meanwhile, last week, Amazon confirmed that layoffs will total more than 18,000 employees globally, with the bulk of job cuts coming later this month. While several teams are impacted, the majority of the job cuts will be in the Amazon Stores and People, Experience, and Technology (PXT) organizations.  

Amazon did not specify which regions would be affected. Amazon intends on communicating with impacted employees — or where applicable in Europe, with employee representative bodies — starting on January 18.

Eighteen thousand employees are the equivalent of about 5.5% of Amazon’s corporate staff, or about 1.2% of Amazon’s 1.5 million workforce including global distribution center and hourly workers. This will be the largest round of job cuts for the company. 

Amazon, like many other tech companies, has been facing economic headwinds. Its  business and cloud services division, Amazon Web Services (AWS) — the company’s most profitable business unit — has been showing signs of slowing growth, reporting revenue growth of 27.5% year-on-year for the quarter ended September compared to 33% and 36.5% year-on-year growth for the previous quarters, respectively.

Other tech sector giants have also been experiencing slowing growth, leading to massive layoffs throughtout the industry.