Amazon cutting benefits to fund pay rises, union says

Online retailing giant Amazon has been criticised for cutting benefits for UK warehouse workers, offsetting part of a pay rise announced this week.

The removal of employee share and incentive schemes could cost some workers £1,500 in a single year, according to the GMB union.

Amazon, it says, is imposing “a stealth tax on its own wage increase – a clear case of robbing Peter to pay Paul”.

The firm is raising pay for hundreds of thousands of staff in the US and UK.

‘PR blitz’

Amazon’s lowest paid US workers will receive $15 an hour from 1 November. In the UK, pay will rise from £8.20 an hour in London to £10.50, while outside London the rate rises from £8 an hour to £9.50.

The pay rise applies to 250,000 workers in the US, 17,000 in the UK and tens of thousands of seasonal workers.

The move comes after criticism of its employment practices, with complaints over its warehouse working conditions.

Tim Roache, the GMB’s general secretary, said the firm had conducted a “PR blitz … without mentioning a dicky bird about cutting staff benefits”.

“Meanwhile, workers still graft in horrific conditions to impossible targets and Amazon refuse to listen to or engage with a trade union,” he said.

“If Jeff Bezos – the richest man in the world – really wants to give hardworking staff a pay rise he should let them keep their share options as well as increasing their hourly rate.”

Share schemes

Amazon, which refuses to recognise the GMB union, confirmed the incentives were being withdrawn.

On a blog post it said it had made the changes because “hourly fulfilment and customer service employees [said] they prefer the predictability and immediacy of cash [to share bonuses]”.

It said it would be phasing out share bonuses, which would be replaced with a share-save scheme, allowing staff to buy discounted shares.

Amazon added that the increase in hourly cash wages would “more than compensate” for the phasing out of other incentives.

“We can confirm that all hourly operations and customer service employees will see an increase in their total compensation as a result of this announcement. In addition, because it’s no longer incentive-based, the compensation will be more immediate and predictable.”

Growing pressure

As well as the recent criticisms, Amazon has also been attacked by campaigners for how much tax it pays. The company is one of the world’s biggest companies in the world, worth about $1 trillion.

Mr Bezos, its founder, is the world’s richest man, with a fortune estimated at some $150bn.

Amazon’s pay rise comes after widespread strikes by workers across Europe.

This summer, workers took action to coincide with the internet retail giant’s Prime promotion event. Staff at warehouses in Germany Spain and Poland were trying to force the firm to offer better working conditions.

Amazon is also facing pressure from workers in the US, and the pay rise coincides with a cross-US movement by retail unions to raise wages to a minimum of $15 an hour, the so-called “Fight for Fifteen” movement.