Amazon to invest £865m to cover full college fees for its US employees

Amazon has announced it will expand its investment in education and training to an estimated $1.2bn (£865m) by 2025 to cover full college tuition fees for its 750,000 hourly employees in the US.

The initiative by Amazon will begin from January 2022 and will cover the costs for college tuition fees and textbooks of its warehouse, transport and other hourly associates who have completed three months of employment, the company said on Thursday.

It will pay employees’ tuition and fees in advance rather than offering reimbursement after completion of course, providing immediate access to funds to those who don’t have sufficient income.

The e-commerce giant has become the latest major employer to woo workers with perks in order to retain them and attract new workers in a tight job market as a result of the coronavirus pandemic.

Amazon has seemingly followed in the footsteps of Target and Walmart, which have also extended similar benefits to their employees.

The company will also cover the cost of high school diplomas, General Educational Development (GEDs) and certifications of the English language as a secondary language.

“Amazon is now the largest job creator in the US, and we know that investing in free skills training for our teams can have a huge impact for hundreds of thousands of families across the country,” Dave Clark, chief executive officer of Worldwide Consumer at Amazon, said in the company’s press release.

This is the latest effort by Amazon to boost its workforce. The e-commerce giant has been aggressively strengthening its hiring efforts since the start of pandemic. In May this year, it hired 75,000 new workers and offered to boost their pay from $15 to an average of $17 an hour.

The firm also introduced sign-on bonuses for new employees with an estimated worth of up to $3,000 as the job market has grown more competitive in recent months.

After the company’s second quarter earnings report in July, Amazon chief financial officer Brian Olsavsky said the company is spending more because of the competitiveness of the labour market.

“We’re spending a lot of money on signing and incentives, and while we have very good staffing levels, it’s not without a cost,” Mr Olsavsky said. “It’s a very competitive labor market out there.”

On Thursday, Amazon said it will also include three new education programmes that would provide skills on data centre maintenance and technology, IT and user experience and research design.

The company previously introduced a program to pay 95 per cent tuition, fee and textbooks costs through its career choice programme for hourly employees who worked with them for at least a year.

But this was limited to “certificates and associate degrees in high-demand occupations such as aircraft mechanics, computer-aided design, machine tool technologies, medical lab technologies and nursing.”

Rival retailers Walmart and Target earlier announced programmes to cover the cost of associate and undergraduate degrees at select schools. In July, Walmart rolled out an offer to pay 100 percent of college tuition and books costs for its associates.