Amazon.com Inc. is raising pay for its hourly employees as the company prepares for the crucial holiday shopping season.
The company on Wednesday said it was increasing average starting pay for its front-line warehouse employees from $18 to more than $19 an hour, with many employees earning between $16 and $26 an hour depending on their location in the U.S. Amazon said the raises represent a nearly $1 billion investment over the next year.
Amazon’s last notable pay increase came about a year ago, when it raised pay for hundreds of thousands of workers to an average starting salary of $18 an hour.
The raises come as Amazon is ramping up for the fourth quarter, which is the company’s most important period of the year. Amazon typically staffs up as the holidays approach to deal with an onslaught of orders from customers.
This year, Amazon is also preparing to host a second Prime event during the quarter. The company on Monday said its 48-hour “Prime Early Access Sale” will take place Oct. 11-12 for members of its Prime subscription program. The two-day event continues a recent trend of Amazon holding sales events over multiple days to maximize sales.
Adding employees has been tougher in recent years as labor shortages have affected industries across the U.S. Amazon, which added hundreds of thousands of employees throughout the Covid-19 pandemic in response to high demand, pulled back some this year on employment as e-commerce sales began to return to prepandemic levels. The company shed almost 100,000 employees during the second quarter this year, though it appears to be adding hourly staff again.
Amazon has had to balance the demands it faces as the year ends with its recent lackluster financial performance, compared with 2020 and 2021, when it saw record earnings. The company in July reported slowing sales and a net loss for the second straight quarter. The company has been among several tech giants that thrived in the pandemic but have seen slower sales as people returned to more normal shopping patterns.
Amazon has tried to adjust this year in part by restructuring its logistics network after it grew too quickly during the pandemic. The company has shut down, called off or pushed back the openings of more than 60 delivery stations, fulfillment centers and other facilities, according to recent data from supply-chain consulting firm MWPVL International Inc.
At the same time, Amazon has looked to entice the workforce it relies on to deliver packages through increased perks. This month, the retailer said it would invest $450 million to fund wage increases and other benefits for delivery drivers employed by members of its Delivery Service Partners network. Investments also include up to $5,250 a year for drivers to pay for educational programs, and financial support for a 401(k) investment plan.
Aside from the pay raises, Amazon said Wednesday it has also worked to improve its career development offerings. The company said it added a new program that places employees in engineering positions within its Amazon Web Services business. Employees can go through the yearlong development program and then complete rotations at AWS, the company said.
This story has been published from a wire agency feed without modifications to the text
