Amazon Invests $1 Billion to Raise Pay, Cut Healthcare Costs for Workers

Amazon has announced a new $1 billion investment to raise pay and reduce healthcare costs for its fulfilment and transportation employees across the United States. 

The company says this will push average total compensation above $30 per hour, factoring in benefits.

Under the plan, hourly wages will climb to an average of over $23. For full-time staff, this translates into an estimated annual pay rise of $1,600. Amazon is also adjusting its progression pay structure, allowing long-serving employees to see larger annual increases than in the past.

In addition to wages, healthcare is a key focus. Starting in 2026, the company will reduce the cost of its entry-level health insurance plan to $5 per week, with co-pays also set at $5. 

According to Amazon, this is a 34% drop in weekly contributions and an 87% cut in co-pay costs for primary care, mental health, and most non-specialist visits.

The announcement to raise pay comes at a time when Amazon is under pressure from labour groups and regulators. Last year, workers at seven U.S. facilities staged walkouts during the peak holiday season, pointing to “unfair treatment” and the company’s reluctance to engage in contract negotiations. 

In December, Amazon agreed to new safety measures after U.S. authorities accused it of failing to protect staff from ergonomic injuries such as back problems.

However, Amazon maintains that its investment comes as a feedback from employees and its commitment to long-term careers. “Average pay is increasing to more than $23 per hour, and average total compensation is increasing to more than $30 an hour when you include the value of our industry-leading benefits package,” the company stated.

The benefits package is not limited to healthcare. Employees gain access to retirement savings with a company 401(k) match, pre-paid tuition at more than 475 partner schools, paid parental leave, flexible time off, mental health support, and even a free Prime membership. Again, health coverage begins on the first day of employment for full-time staff.

More than 425,000 U.S. employees have already taken part in Amazon’s free skills training programmes since 2019, revealing the company’s goal to develop talent from within.

The timing of this pay and benefits expansion coincides with the run-up to major shopping events like Prime Big Deal Days and the holiday season, when demand on Amazon’s workforce increases. 

The company insists the changes are about creating a workplace where employees “can build a career, support their families, and invest in their future,” not just meeting seasonal pressure.