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

CNN Business

Amazon reported a significant loss in the first three months of the year, which led to the company’s shares plummeting.

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.

The company attributed the loss mainly to a loss of $ 7.6 billion from the investment in the electric car manufacturer Rivian Automotive. Rivian, as Amazon led an investment of $ 700 million in 2019, has seen its stock plummet more than 75% since its huge success in November 2021.

Amazon shares (AMZN) 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.

Amazon’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 the 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.

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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