Amazon boosts pay, healthcare of employees with $1 billion investment

The tech giant said it would raise the average pay to more than $23 per hour, with long-tenured employees receiving an hourly increase of $1.10 to $1.90. Full-time employees can also expect an annual raise averaging $1,600. 

The company is lowering its entry-level healthcare plan to $5 per week and $5 for co-pays for primary care, mental health, and most non-specialist visits starting in 2026. It said the adjustments meant that contributions would drop by 34% and co-pays by 87% for employees using the plan.

Based in Seattle, Amazon had more than 1.5 million full-time and part-time employees worldwide at the end of last year. It also employs temporary workers and independent contractors on a seasonal basis, especially during the busy holiday season.

The announcement follows a series of layoffs and labour disputes in recent months, with Amazon CEO Andy Jassy leading a cost-cutting campaign that has resulted in over 27,000 positions eliminated since 2022. 

In December, Amazon workers walked out of seven U.S. facilities during the peak of the holiday season to protest against unfair treatment. That same month, the company agreed to implement safety measures at all of its U.S. facilities to settle claims by the Occupational Safety and Health Administration (OSHA) that it failed to protect workers against hazardous conditions that led to back and other ergonomic injuries.

Amazon is also facing intense competition from other major retailers. Walmart, the largest private employer in the U.S., raised the average hourly wages for its staff from $17.50 to $18 in January and now offers hourly pay rates between $14 and $19 per hour, depending on the location. Target also raised its starting hourly wages by $15 to $24 at its stores and distribution centers, with the average hourly rate now exceeding $18.