Amazon on Thursday announced the first loss since 2015 because sales have slowed, costs have risen and electric vehicle company Rivian has erased its investment profits.
News broke that Amazon shares fell 10% in the hours following the transaction.
Tech giant revenue rose 7% to $ 116.4 billion in the first quarter, the lowest growth rate in nearly two decades. In the same quarter last year, Amazon’s sales rose 44% to $ 108.5 billion. It lost 3.8 billion in the quarter, compared to 8.1 billion in the same period a year ago.
The company warned that there could be more losses in the future. For the current quarter, Amazon expects operating revenue between দ্বিতীয় 1 billion loss and $ 3 billion profit in the second quarter of 2021, compared to 7.7 billion.
The electric vehicle company was mainly responsible for the loss of Amazon’s stake in Revian. Amazon owns about 20% of the company and lost $ 7.6 billion after electric car shares fell more than 50%.
“The epidemic in Ukraine and the ensuing war have brought unusual growth and challenges,” said Andy Jesse, Amazon’s chief executive officer.
Brian Olsavsky, Amazon’s chief financial officer, said the company spent about $ 6 billion this quarter on inflation, rising warehousing capacity and other problems.
Amazon was one of the biggest winners of the epidemic, with customers moving away to shop online and companies leaning towards Amazon Web Services (AWS) ‘s cloud computing unit to run their business, recording huge jumps in sales. AWS sales grew 37% in the quarter.
Buyers are turning to bricks and mortar as Covid-19 vaccination rates increase and hospital admissions fall. In-store purchases rose 11.2% in March, while online fell 3.3%, according to the monthly transaction report MasterCard SpendingPlus.
Amazon is not the only online retailer that is experiencing change. According to the Census Bureau, the share of online retail purchases fell from 15.7% in the second quarter of 2020 to 12.9% in the last three months of 2021. But a MasterCard survey shows that online retailers have benefited greatly from the epidemic. E-commerce grew by more than 83% from March 2019 to March 2022 with a 9.4% growth rate for in-store purchases.
The company faces additional pressure from employees across the country who are pushing for unions and negotiations for higher wages, better working conditions and benefits.
Earlier this month, Amazon workers in Staten Island, New York, cast their first vote for a union in the United States. The vote to establish a union at New York’s second Amazon facility will be counted Monday, and organizers say they have been flooded with calls from other Amazon outposts to help establish the union.
“Today, as we no longer pursue physical or stuffing capabilities, our teams are fully focused on improving productivity and cost efficiency across our perfection network. We know how to do it and have done it before. It may take some time, especially as we work through ongoing inflation and supply chain pressures, but we are seeing encouraging progress, ”said Jesse.