Maybe This is Too Cool

Between rounds of shock layoffs, Amazon directors enjoy private rock concert

Back in 2014, the US Air Force faced some difficult decisions. The budget didn’t solve, so cost controls and structural changes became necessary.

The service’s Chief of Staff, Gen. Mark Welsh, announced a reduction of 25,000 airmen, around 7% of the workforce. He directed it be done rapidly, and simultaneous with operational workload intensifying. The cuts were in a portfolio of measures to prevent the service running out of cash. Or so it was argued.

It was a dire situation, Welsh told commanders. Every unit would need to trim back and find new ways to conserve. Every individual would feel the pinch. Everyone would need to change their behavior.

Because every dollar counted.

Except it all turned out to be a load of BS. While airmen in the field were getting rinsed and nit-picked over nickels and slogging harder than ever, Welsh and his fellow executives continued a royalty lifestyle.

They splashed tens of millions annually on private jets, personal assistants, and chauffeurs. The generals had their own bands, their own traveling show choir, and uniformed servants to prepare their meals, clean their taxpayer-funded houses, and pluck weeds from their lawns.

Welsh’s cost philosophy failed to take root in the rank and file, because everyone could see every dollar didn’t count. What did take hold was a generational morale crisis, as airmen lost trust and confidence in their leaders. Responding to complaints from overworked pilots, generals encouraged them to quit. Someone else would backfill them.

The Air Force ended up with a huge pilot shortage, a recruitment problem, and record suicide rates. It lost strategic footing, with troubled acquisition programs, decaying infrastructure, and aging aircraft supported by exhausted and frustrated airmen. Strong airmen left service while others reduced their effort levels.

The situation wasn’t created by the pressures of war or the federal budget. It was created by the arrogance and dishonesty of executives.

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I recognize that same blend of toxicity now as I observe the conduct of Amazon’s senior executives. The same lack of empathy. The same reliance on authority. The same self-obsessed belief in their own brilliance. Most of all, the same low regard for those who create their company’s value.

Before I explain why I feel comfortable asserting these things, let me tell you about something called Ops Live.

Every couple of years, Amazon gathers every individual in a director or VP level role in its global fulfillment, transportation, and logistics operations together in one place for a “conference.” The idea is to get everyone collaborating about the current and future state of the business.

In reality, it’s an overpriced party and networking event legendary for one-way messaging from corporate mouthpieces, usually absorbed through the foggy veil of a shareholder-funded hangover. The swag package is great. Thematically, it’s fun and vibrant. But a conference, it isn’t.

I attended Ops Live in ‘22. We had just delivered massive expansion in the middle of a global pandemic. Naively, many of us expected to participate actively in the event to share all we had learned and help the company incorporate that learning.

What we got wasn’t appreciation or recognition, or even the right to be involved. Heck, I would have settled for inspiration or a bit of strategic clarity. What we got instead was a torrent of tediously obvious platitudes squeezed between sanctimonious finger-wagging from senior executives. They spent millions to get us into a single room just to tell us to save more money.

But the real absurdity was the juxtaposition a private rock concert against the backdrop of dire budget catastrophizing.

No, I’m not joking.

Executives stopped wringing their hands just long enough to put them in the air for Bon Jovi, who rattled the legendary Ryman Auditorium for just under two hours, gathering an undisclosed fee we can safely assume exceeded $2.5M.

It was cool. I had fun. I could understand that executives intended this as a gesture of gratitude, or at least a gesture of reassurance that we were on the right track.

And then I realized I had become one of those Air Force senior officers from years earlier. And deep down, in places I don’t talk about at parties, I didn’t like that feeling. Especially after getting back to my neighborhood of the network and re-joining the cultural reality faced by my people.

Still, it was one thing to have that party in ‘22, a time of fake whingeing about money but no real cuts. The business had been overbuilt during the pandemic and there would be a correction cycle, but we took money posturing to be what it was: theatrical. Mainly intended for other audiences.

However.

If that concert had instead been held in the spring of ‘24, against a backdrop of layoffs, pay freezes, and rollbacks of people development programs, it would have been a much different story. A much darker story.

But, to paraphrase Foo Fighters front-man Dave Grohl, here we are.

It is that darker story. Because it did happen in the spring of ‘24 against that very backdrop.

Last week, Ops Live ‘24 took place in Nashville. I can’t tell you the agenda, content, exact duration, perceived value, or costs of the conference. I can’t tell you how many people attended, though I estimate between one and two thousand spent the majority of the work week at the event while their deputies ran the Amazon network.

I’ve asked Amazon’s PR team questions about these things, and they have not responded.

What I can tell you is that even as executives squeeze and sweat and hound rank-and-file Amazonians to scrimp and save every precious dollar, even as they fire quality performers, stall promotions, and stretch everyone to do more with less, someone found enough money to rent out the Ryman Auditorium and pay the Foo Fighters to play a private show for senior leaders.

I asked Amazon’s Margaret Callahan if she could confirm the details. I sought her out because of her energetic defense of Amazon’s choice to freeze base salary for managers this year after they delivered record profits and cash flow.

She didn’t respond. But the evidence is discoverable online, and the Amazon grapevine is aflame with chatter about it.

A Foo Fighters fan group posted pictures from inside the auditorium, labeling the show a private Amazon event. Someone at the show posted an update to a site which collects concert setlists, again labelling it a private Amazon event.

Nashville music industry worker Hannah Laney posted a picture of herself taken on May 22 with Grohl to Instagram. She’s wearing a Ryman access badge labelled “Ops Live.”

And of course, as will always be the case no matter what direction is given, there are videos of the performance available on social media. Here’s one of them.

Incidentally, the band is a favorite of Amazon’s CEO, which is probably the first time I’ve noticed a scintilla of overlap between myself and Andy Jassy.

We can assume the reason you won’t see an Amazon story about this, and the reason Amazon’s senior leaders are not crowing about it online, is because they understand how optically terrible this is. They know how it will likely make their people feel. How it will exacerbate the view that not enough of Amazon’s profits are making it into the hands of those who create them.

But I guess maybe, and I’m just spit-balling here, if you can’t be open about something with your own people, maybe it’s best not to do that thing.

Maybe if something is so cool you can’t talk about it, then maybe it’s too cool.

It takes a special sort of arrogance to make people jobless on a cost rationale while pissing away money on frills. It reflects an authoritarian psyche. Executives doing what they can while mere workers suffer what they must.

It reflects an unspoken embrace of inequality. For the masses, a slice of pizza, a handful of chocolates during mandatory overtime, and a free cupcake to celebrate inclusion when they’re not really included.

For the elites, a private concert from a headlining rock band in between tour stops, then off to another round of pounding the table to demand higher productivity. Which will be needed to pay for future executive parties.

Meanwhile, a burned out workforce stretched by efficiency squeezes toils in constant fear of financial insolvency or ambush job loss, stretched on the rack to save every dollar. Because every dollar counts, right?

And this brings us to the dishonesty.

It is dishonest to pretend job cuts are necessary when they are not.

It is dishonest to pretend it’s necessary to freeze salaries when it isn’t.

It is dishonest to pretend people aren’t stretching to cover multiple roles after those to their left and right have been laid off, and then to further ignore or downplay the impacts of such overstretch.

And of course, it’s dishonest to pretend leadership principles matter for everyone when it’s clear certain ones don’t apply to executives. There is nothing frugal about a private rock concert. And having exclusive, expensive parties during downsizing is a trust killer.

Why This Matters

At this moment in time, Amazon is displaying a lack of integrity and a high degree of executive arrogance.

That might be alright in a certain kind of business. You might get away with it elsewhere. But it won’t work in a business that depends on teamwork, trust, and discretionary effort. A business where leadership is key, and therefore character matters. A business where authority ultimately depends on the consent of the governed.

People won't follow hypocrites. They won't follow liars. They won't follow bullies. They won’t follow the self-obsessed. Or more precisely, the type who will follow such types are not the type you want.

This spells trouble for Amazon. The company is far more dependent on discretionary effort than other sorts of businesses. And maybe, based on this evidence, more dependent on discretionary effort than it realizes.

Maybe it doesn’t realize that its operation depends on rallying people to give more. To stretch. To fill gaps and make glove saves. To go the extra mile. To keep working when you’re tired. To take the extra time to learn and improve.

Operations, by its very nature, depends on everyone giving everything they’ve got. If everyone throttles back to contractual obligation and nothing more, Amazon fails very quickly. And to keep those throttles advanced, people need leaders they respect and believe in.

How to Lose People

Maybe Amazon knows it needs discretionary effort from people but chooses to try and extract it another way. It seems to prefer coercion as a method to keep people producing rather than inspiring them and earning their best.

Ambush style layoffs remove the feeling of safety, making people desperate to prove they shouldn’t be next. With this approach, Amazon embraces a timelessly blood-curdling rationale: nothing concentrates the mind like a credible threat.

Annual attrition targets for a fixed percentage of people every year create a survival mentality. No one wants to be the slowest gazelle when the lion comes around again, so everyone runs faster. Classic coercion.

Making people rehearse for months or years in the next higher role before they can be promoted is also coercive. They give more than they are paid to give so they can keep their careers moving. Amazon gets their best effort at a discount, and while keeping open the option of never promoting them.

Creating career survival competitions among people is a common Amazon tactic resulting from its adherence to a “rank and yank” talent assessment process. No one wants to be ranked low enough to be at risk, so people become cut-throat, out-maneuvering one another rather than deliver their own individual best.

All of this coercion drives a fearful and defensive mindset among Amazon’s rank-and-file. A negative culture follows, with high stress and legendary burnout.

But executives aren’t doing it by mistake.

They’re obviously possessed of the view that flexing authority and posing tacit threats to people is an effective way, a cheaper way, and more power-serving way to keep them productive enough to solve the business.

But it also means executives are aware, deep down in places they don’t talk about at Ops Live, that they are dependent on operational performance.

Which means that if the current levels of arrogance and dishonesty continue, catastrophe will at some point come. This is a clinic in how to lose people, and the ones with principles will be the first to go.

“Disgusting”

This is how mid-level managers are describing Ops Live as word of it filters around. I’ve heard this word several times the past few days.

Amazon’s mid-level managers have had the unenviable task of firing people, sometimes by ambush. They’ve had to rally performance in groups of people fearful of more layoffs. They’ve had their own pay frozen after reasonably expecting to share more in their company’s epic financial successes.

All in the name of frugality.

To now see that frugality (a) isn’t really a concern and (b) doesn’t apply to senior leaders makes them feel they’re managers for a dishonest organization which takes them for granted.

Like the Air Force of a decade ago, today’s Amazon is courting strategic failure. The question is whether there is enough humility to see it, and enough honesty to acknowledge it.

The circumstances of this debacle make me doubtful on both counts.

TC is an independent writer and speak on organizational leadership. He is a former Amazon general manager and military commander with three decades of leadership experience.