Several billion losses, setback for Amazon unaware of the crisis

Several billion losses, setback for Amazon unaware of the crisis


Amazon announced its first quarterly net loss since 2015: $ 3.8 billion in the last quarter, after gaining $ 8.1 billion in the same period last year.

Several billion losses, setback for Amazon unaware of the crisis
Source: ANIRUDH at Unsplash

It’s the financial reporting season and here’s a surprise: Amazon recorded its first quarterly loss since 2015. As announced by the US group on April 28, 2022 after the closure of markets in New York, the loss amounted to $ 3.8 billion US (EUR 3.43 billion). A year ago, in the same period, Amazon recorded profits of $ 8.1 billion.

What happened ?

We are not talking about pebbles in the shoe here, the Amazon model suffers from several diseases. First, Amazon recognizes a loss of $ 7.6 billion for its investment in Rivian Automotive, one of Tesla’s competitors. Due to multiple delays, Rivian shares lost more than half of their value in the first quarter of 2022, which forced Amazon to significantly reduce its share of electric car start-ups.

But Amazon’s losses can not be explained by this devaluation alone. The slowdown in online spending is real and widespread. After months of euphoria in the online sales market since the onset of the Covid-19 pandemic, March 2022 is the first month of a drop in online sales worldwide. Amazon does not say this directly, but Mastercard has confirmed this by publishing some information related to tracking spending on the credit card payment network.

While it is clear that Amazon benefited from the crisis during the Covid-19 pandemic, as people with disabilities turned to the Internet to buy what they needed, this growth has now slowed as those who have been vaccinated feel more comfortable leaving. out in a world where all the stores have reopened. In addition, the war in Ukraine led to significant increases in energy and consequently transport.

Amazon is facing inflationary pressures, supply chain issues and labor shortages. Despite the increase in the price of the Prime subscription in the United States, as well as the 5% increase in fees charged to third-party vendors using shipping and storage services, it was not enough to avoid the high losses of the last quarter.

Add to this the fact that the company is facing a growing push for unionization in the United States. We remind you that the workers voted in favor of their representation by an independent union, against which Amazon fought hard, which has so far always succeeded in suppressing trade union tendencies in the beginning. Amazon believes that the small group of trade unionists has “threatensthe employees of his warehouse to force them to vote in favor of the creation of a union. A second union election is under way at a warehouse on Staten Island in New York.

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