The technology giant said on Thursday that it had a net loss of $ 3.8 billion in the quarter ended March 31, a sharp drop in revenue from the same period last year, when it made a profit of $ 8.1 billion. It was also a big omission from the $ 4.4 billion profit that analysts polled by Refinitiv predicted.
Shares of Amazon (AMZN) sank about 10% in after-hours trading after the results.
“The pandemic and the ensuing war in Ukraine have brought extraordinary growth and challenges,” Amazon CEO Andy Jesse said in a statement.
Amazon’s total revenue rose 7% from the same period last year to 116.4 billion dollars, slightly exceeding analysts’ forecasts, but slower than the growth of 9% in the last months of last year. The company forecasts that revenue growth will slow further in the next quarter, with growth rates expected to be between 3% and 7%.
Jesse mentioned Amazon’s rapid growth in the consumer business during the pandemic and the “doubling” of the company’s performance network over the past two years.
“Today, as we no longer pursue physical or personal capacity, our teams are fully focused on improving productivity and cost-effectiveness throughout our implementation network,” he added. “This may take some time, especially as we work through the current pressures of inflation and the supply chain, but we are seeing encouraging progress in a number of dimensions of the customer experience.”
The company also announced that Prime Day, its annual sales award, will be held this July in more than 20 countries.
In a call for profits, Amazon chief financial officer Brian Olsawski said higher inflation, fuel prices and labor restrictions had added $ 2 billion to spending compared to last year.
“The cost of transporting a container abroad has more than doubled since pre-pandemic levels,” he said. “The price of fuel is about one and a half times higher than it was even a year ago.”
The rise of the Omicron option by the end of 2021 has led to a “significant increase” in employees on leave, prompting Amazon to increase hiring to make up for absences, Olsawski said. But as workers returned when options subsided, “we quickly moved from a staff shortage to a surplus,” he added. This has led to “lower productivity”, adding another $ 2 billion in costs, he said.
The blow to Amazon’s profits comes as the company continues to face pressure from its warehouse workers on issues such as pay and working conditions. Workers at a warehouse on Staten Island, New York, voted to create the first-ever union in the United States of the e-commerce giant earlier this month. Amazon has since filed a complaint calling for an end to the entire vote.
Separate Amazon union elections in Bessemer, Alabama, also ended recently with results too close to being announced.
Both union efforts grew out of workers’ frustration with Amazon’s attitude toward workers in the wake of the pandemic, and were also motivated in part by increased national attention to issues of racial justice and labor rights.
Amazon subsequently announced that it would conduct an audit of racial justice led by former US Attorney General Loretta Lynch.
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