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Silence of the AMZNs

Psst. Psst. Hey, over here!

If you own shares of Amazon.com and are thinking of selling, you'd better speak up now while you can, before the company's Speech Police hunt you down and apply the First Amendment muzzle.

OK, that's (probably) an exaggeration, but I can't help but wonder whether it's the illogical next step in the wake of news that the bleeding, battered e-tail giant is forcing rank-and-file employees targeted in the recently announced round of layoffs to sign "no-talk" agreements in order to get additional severance pay and benefits.

Specifically, as reported in the Wall Street Journal, clauses in the separation agreements prohibit laid-off workers from making critical, disparaging remarks about Amazon.com to the media or even (and this one kills me) "any individual."

I'm probably courting a visit from the AMZN cops myself, and I'm (thankfully) not even a shareholder.

As the WSJ points out, non-disparagement clauses are standard operating procedure at the executive level. And for good reason: They prevent departing execs from exposing high-level trade secrets or dirty laundry. For public companies, that's especially important because trash talk from above can hurt stock prices.

But what can some of the approximately 1,300 Amazon.com ground troops (15% of the workforce) losing their jobs say that would be a bombshell, or even detrimental, to the company? That it's still losing money? We already know that. AMZN just reported Q4 losses of $545.1 million, despite a 44% increase in sales over the year-ago quarter. No one was shocked.

Would we find out the company is disorganized? Wasteful? Worshiping Satan? What? What's the dark secret?

It may have more to do with company's plan to close its Seattle customer-service center and relocate those activities to cheaper job markets in the Midwest or overseas. Perhaps that move and the non-disparagement clause has more to do with efforts by a union to organize Amazon.com workers in Seattle - again, something that is commonly known.

According to the WSJ, company officials deny a link between the Seattle closure, the no-talk agreements and union organizing efforts. But when companies try to clamp down on information flow, to essentially control the news, it leaves huge holes of speculation for the media and everyone else to fill in.

Amazon.com and its shareholders have had a rough time in the past year. Since closing at an all-time high of $106.69 on Dec. 10, 1999, AMZN has fallen 84% to Wednesday's mark of $17.31, and a single-digit stock price likely is part of the company's near future.

It is to Amazon.com's credit that the company is offering an extra severance package to layoff victims, as well as a $2.5 million trust fund in AMZN stock to cover future layoffs.

But the company shouldn't concern itself with what departing workers have to say to their spouses, neighbors or the local paper about unions or anything else. It's bad business. Worse, it's bad mojo, and Amazon.com needs a whole lot less of that.



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