Amazon is in that club of employers (Google, Twitter, Facebook, Microsoft, etc), where working there functions as a stamp of quality. Their employees are frequently cold called by recruiters working for other members of the club, middle tier companies, and start ups that cannot get enough people through their personal network. Amazon pays very well relative to most jobs, even many programming jobs, but it does not pay as well as other members of the club. The salary is just a little less than you’d make elsewhere, but equity and bonuses are backloaded such that many people are driven out before they receive the bulk of them. The health insurance isn’t as good. I realize paying for your own lunch is normal, but Amazon makes employees pay for a lot of things other companies offer for free, like ergonomic keyboards. And then there’s the work environment.
How does Amazon maintain a talent pool equivalent to the other prestige club members while paying less?
This is anecdotal, but my friends at Amazon are much more likely to have come from unprestigious companies or schools than my friends at other club companies. Working at Amazon doesn’t make them smarter, but it does provide widely-accepted proof of their intelligence that they didn’t have before, and can leverage into cushier jobs later. In some ways Amazon’s reputation for chewing people up and spitting them out is a feature here, because leaving after 18 months raises 0 questions among other employers.
So my hypothesis is Amazon invests more in finding and vetting smart people who aren’t currently holding Official Smart Person Cards, and that part of employees’ compensation is getting that card. In this way it’s like the US Armed Forces, which are grueling and don’t pay well but people tend to leave them with many more options than they started with.
I’m unconvinced this is a winning strategy. Operational turnover is expensive, and bad working conditions decrease people’s productivity even when they’re well compensated. But it does at least explain why it hasn’t collapsed already.
Aceso Under Glass 
Anecdotal, but I’d bet that most CS majors at the university I went to didn’t realize what the culture is like (I sure didn’t until the last few months). The recruiters who came to campus would, understandably, mostly focus on benefits and perks. The actual culture would only be referenced with cliches like “work hard, play hard” and “customer obsession”, and most people didn’t know anyone who worked there. Maybe factors like this could help explain the non-prestigious school thing? I.e. less prestigious schools have less contact with what it’s like to actually work there?
In my case, I didn’t even consider that companies could have meaningfully varying cultures until I’d worked at one for a few years.
On the other hand, if we’re talking about organizations which manage to be considered credential-granters and then survive and thrive in the face of very questionable decisions…well, Amazon’s not really breaking any new ground there, I think.
Yeah, I felt the same way about open offices- so little variation there’s no point in looking.
So {Amazon, MS, Facebook, Google} is certainly a recognizable tier…but {Facebook, Google} [1] is also a definite level, above that of Amazon. To most people Amazon is a prestige job, but honestly not to people at the very top; I certainly don’t know _anyone_ who had the option of Facebook or Google and picked Amazon instead. A lot of people see Amazon as a place where they can do decently well…and accumulate enough of a track record/experience/knowledge to get hired where they really want to be: either Facebook, Google, or some prestige startup.
Sometimes people without the right Elite Credential are $20 bills on the ground, and sometimes they’re just…not as good as the credentialed.
So honestly my guess for the answer to your question is pretty simple: Amazon gets the people who are good but not great.
[1] Possibly MS too. I honestly don’t know how to evaluate people who are there right now.
It seems like we mostly agree on the facts but draw different conclusions. People who already have prestige or have access to a cushier source of it won’t choose Amazon, but that doesn’t mean Amazon doesn’t have a comparative advantage recruiting and evaluating the relatively uncredentialed.
Would love to hear hard data on relative quality, my anecdata is that the tier 0 companies hire a lot of idiots too, and the main benefit of their hiring process is that people believe in it.