Amazon.com Inc. will end warehouse worker pay raises in June, after spending almost $800 million in extra incentives to keep employees picking, packing and shipping through the Covid-19 pandemic.
The world’s largest e-commerce company extended the pay bumps twice, but an Amazon spokeswoman said on Wednesday that the company doesn’t anticipate extending it a third time and plans to return workers to their prior wages in June.
Amazon (AMZN) has been overwhelmed with demand because many stores are closed, and shoppers are staying home to avoid exposure. With shipping delays growing, the company hired 175,000 additional people to keep up and in March instituted temporary $2-per-hour raises for hundreds of thousands of warehouse workers earning at least $15 an hour.
However, the company said late Tuesday that faster delivery times will gradually return as it catches up with demand.
The final pay extension for warehouse workers will run through May 30. “We are also extending double overtime pay in the U.S. and Canada,” an Amazon spokeswoman said in an email Wednesday. “These extensions increase our total investment in pay during Covid-19 to nearly $800 million for our hourly employees and partners.”
When asked if the company will return to its regular pay and overtime wages after May 30, the spokeswoman said “yes.”
Companies allowed to operate through the pandemic, such as supermarkets, warehouses and transportation firms, have benefited from a boost in demand and a labor market swollen with newly unemployed workers. But their treatment of workers has drawn regulatory scrutiny as well as protests from employees worried about catching Covid-19 at work and bringing it home to their families.
Amazon workers have demonstrated in New York, Chicago and Minnesota demanding better treatment, and several lawmakers have written letters asking the company to be more transparent about the scope of infections in its facilities around the country.
Amazon last month said it expected to spend $4 billion in the current quarter on various measures to keep operating while also keeping workers safe. The money is being spent on temporary raises, masks and temperature checks for workers as well as enhanced cleaning of its warehouses.
News about the pay raise extension was reported earlier by Recode.
“In addition, we are providing flexibility with leave of absence options, including expanding the policy to cover Covid-19 circumstances, such as high-risk individuals or school closures,” Amazon said. “We continue to see heavy demand during this difficult time and the team is doing incredible work for our customers and the community.”
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