Amazon announced today that it will pay 100% of college tuition for its approximately 750,000 U.S. hourly employees. The company estimated that the new benefit along with other new training it will offer would require a total investment of $1.2 billion by 2025.
Amazon’s announcement comes on the heels of other major employers such as Target and Walmart extending similar offers to their U. S. employees as national companies continue to sweeten the compensation pot to lure and retain workers during the tight labor market.
The Amazon offer will begin in January 2022 and will include the cost of college tuition, fees and textbooks for warehouse, transportation and other hourly employees who want to pursue bachelor’s degrees. To be eligible an employee must have been employed by Amazon for 90 days.
The new benefit will also begin covering educational costs for high school diploma programs, GEDs and English as a second language certifications. Amazon will also add three new education programs to provide its employees with the opportunity to learn skills in data center maintenance and technology, IT, and user experience and research design.
Amazon previously offered to pay for 95% of tuition, fees and textbooks for hourly associates through its career choice program, a benefit that provided up to $12,000 over four years for hourly associates who’d been with the company for at least one year. It 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.”
“Amazon is now the largest job creator in the U.S., 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,” said Dave Clark, CEO of Worldwide Consumer at Amazon, in the company’s press release. “We launched Career Choice almost 10 years ago to help remove the biggest barriers to continuing education—time and money—and we are now expanding it even further to pay full tuition and add several new fields of study.
“This new investment builds on years of experience supporting employees in growing their careers, including some unique initiatives like building more than 110 on-site classrooms for our employees in Amazon fulfillment centers across 37 states. Today, over 50,000 Amazon employees around the world have already participated in Career Choice and we’ve seen first-hand how it can transform their lives.”
Amazon said it will pay employees’ tuition and fees in advance rather than offering reimbursement after coursework completion, thereby permitting employees who don’t have sufficient funds on hand to begin immediately accessing the education options they want to pursue. Front-line employees will have access to the annual education funds as long as they remain at the company, with no limit to the number of years they can benefit from the offer.
Amazon has not yet indicated which colleges workers will be eligible to attend using the new benefit.
Amazon’s decision today will allow it to keep pace with several other national employers in addition to Walmart and Target that have recently geared up their educational benefits for employees.
This is just the latest move by Amazon to strengthen its workforce. Last May, it said it was hiring 75,000 new workers, and that it would boost the starting pay from $15 to an average of $17 an hour. It also introduced sign-on bonuses of up to $1,000 to attract workers.
Amazon also announced Thursday that it plans to retrain a total of 300,000 employees – about 30% of its total workforce – for higher-skilled, fast-growing jobs within the company over the next four years. That up-skilling will also be tuition-free for employees.