Amazon shares plummet as the company reports a loss of almost $ 4 billion

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. There was also a big miss of the $ 4.4 billion profit that analysts surveyed by Refinitiv had predicted.

Amazon (AMZN) the shares fell around 10% in after-sales after the results.

“The pandemic and the ensuing war in Ukraine have brought unusual growth and challenges,” Amazon CEO Andy Jassy said in a statement.

Amazon̵[ads1]7;s total revenue grew 7% from the same period last year to $ 116.4 billion, beating analysts’ forecasts, but slower than the 9% growth in recent months. The company predicted that revenue growth will slow further next quarter, and expects growth of between 3% and 7%.

Jassy referred to Amazon’s groundbreaking growth in its consumer business during the pandemic, and the “doubling” of the company’s fulfillment network over the past two years.

“Today, since we are no longer looking for physical capacity or staffing capacity, our teams are completely focused on improving productivity and cost-effectiveness throughout our fulfillment network,” he added. “This may take some time, especially as we work through ongoing inflation and supply chain pressures, but we are seeing encouraging progress on a number of customer experience dimensions.”

The company also announced that Prime Day, its annual sales bonanza, will take place in July in more than 20 countries.

In an income interview, Amazon’s CFO, Brian Olsavsky, said that higher inflation, fuel prices and work restrictions gave $ 2 billion in costs compared to last year.

“The cost of shipping a foreign container has more than doubled compared to pre-pandemic rates,” he said. “The cost of fuel is about one and a half times higher than a year ago.”

The emergence of the Omicron variant towards the end of 2021 led to “a significant increase” in employees who went on leave, which led Amazon to increase its employment to make up for the absence, Olsavsky said. But as the workers returned as the varieties dwindled, “we quickly gave up from being understaffed to being overstaffed,” he added. This resulted in “lower productivity” that resulted in an additional $ 2 billion in costs, he said.

Amazon’s earnings hit comes as the company continues to face pressure from warehouse employees over issues such as pay and working conditions. Workers at a warehouse in Staten Island, New York, voted to form the e-commerce giant’s first U.S. union earlier this month. Amazon has since filed an appeal, requesting a do-over of the entire poll.

A separate union election in the Amazon in Bessemer, Alabama, was also concluded recently with the results too close to be called.

Both union efforts grew out of workers’ frustrations over Amazon’s treatment of workers in the midst of the pandemic, and were also partly motivated by increased national attention to issues of racial justice and labor rights.

Amazon then announced that it would conduct a racial equality audit led by former U.S. Attorney General Loretta Lynch.

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