Amazon Commits Over $1 Billion to Boost Employee Compensation

Amazon.com announced on Wednesday that it will invest more than $1 billion to enhance employee compensation and reduce healthcare costs for its U.S. fulfillment and transportation workforce. This initiative aims to raise the average total compensation for employees to over $30 an hour, which includes benefits.

As part of the investment, the average hourly wage will increase to more than $23, with full-time employees expected to see an average annual pay increase of $1,600. The company is also taking steps to lower the cost of its entry-level healthcare plan to $5 per week and $5 for co-pays, effective in 2026. This adjustment marks a significant 34 percent reduction in weekly contributions from employees.

Impact on Workforce and Prior Actions

At the end of last year, Amazon employed more than 1.5 million full-time and part-time workers. The company often hires temporary staff and independent contractors, particularly during peak seasons such as the holiday period.

In a notable incident last year, workers at seven U.S. facilities walked off the job during the holiday shopping rush. This action was in response to claims from union officials that Amazon had not engaged in contract negotiations. Employees expressed concerns about what they characterized as unfair treatment by the retailer.

Additionally, in December 2022, Amazon reached an agreement to implement improved safety measures across all its U.S. facilities. This decision followed claims from a federal agency that Amazon had not adequately addressed worker safety, particularly concerning ergonomic injuries and back problems.

These recent investments and actions reflect Amazon’s ongoing efforts to enhance employee welfare while navigating challenges related to workforce satisfaction and safety concerns. The company’s initiatives highlight a significant commitment to improving the overall working environment for its employees in the U.S.