Shares in U.S. tech giant Amazon (AMZN) were lower today despite the company fattening the wage packets of staff on both sides of the Atlantic.
Elevate Your Investing Strategy:
- Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
Money and Health
Amazon said it was investing over $1 billion to hike pay and lower healthcare costs for U.S. fulfillment and transportation employees. The move will push up the average total pay to $30 plus an hour including benefits.
The technology giant said the average pay would increase to more than $23 per hour, adding that full-time employees will see their pay increase by $1,600 per year, on average.
The company said it is lowering the cost of its entry-level health care plan to $5 per week and $5 for co-pays, starting in 2026, representing a 34% drop in weekly contributions from employees.
Amazon had more than 1.5 million full-time and part-time employees at the end of last year. The company also hires temporary workers and independent contractors seasonally, particularly around the crucial holiday season.
Brit Boost
British staff also received good news. From the end of the month, the minimum starting pay will rise by 5.9% to £14.30 an hour or by 5.5% to £15.30 an hour depending on location.
Annual salaries for frontline employees will start at a minimum of £29,744 and up to £31,824 depending on location.
The increase will affect tens of thousands of staff across the UK, said Amazon, adding that its minimum starting pay will have risen by 43% since 2022.
Amazon’s UK country manager John Boumphrey said: “Our UK frontline employees are essential to our success.”
Indeed, this is reflected in Amazon’s risk factors – see below – under the Production tab.
It comes at a time when Amazon is facing intense competition from rivals such as Walmart (WMT) and Target (TGT) for staff as it looks to grow its operations such as delivery and technology.
It also follows industrial action taken by Amazon workers at seven U.S. facilities last year. The staff walked off the job during the holiday shopping rush, after union officials said the retailer had failed to come to the bargaining table to negotiate contracts. Employees were protesting what they said was Amazon’s unfair treatment of its workers.
In December, Amazon also agreed to implement safety measures at all of its U.S. facilities to settle a federal agency’s claims that it failed to prevent workers from developing back problems and other ergonomic injuries.
Is AMZN a Good Stock to Buy Now?
On TipRanks, AMZN has a Strong Buy consensus based on 45 Buy and 1 Hold ratings. Its highest price target is $300. AMZN stock’s consensus price target is $264.51, implying a 14.96% upside.
