The tech giant said on Thursday 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 posted a profit of $8.1 billion. It was also a big loss from the $4.4 billion profit that analysts surveyed by Refinitiv had forecast.
“The pandemic and subsequent war in Ukraine have brought unusual growth and challenges,” Amazon CEO Andy Jassy said in a statement.
Amazon’s overall revenue grew 7% from the same period last year to $116.4 billion, slightly beating analyst forecasts but slower than the 9% growth in the final months of last year. The company forecast that revenue growth would slow further next quarter, anticipating a growth rate of between 3% and 7%.
Jassy referenced Amazon’s breakneck growth in its consumer business during the pandemic and the “doubling down” of the company’s fulfillment network in the past two years.
“Today, since we are no longer chasing physical or headcount capacity, our teams are fully focused on improving productivity and cost efficiency across our fulfillment network,” he added. “This may take some time, particularly as we work through ongoing supply chain and inflation pressures, but we see encouraging progress across a number of customer experience dimensions.”
The company also announced that Prime Day, its annual sales bonanza, will take place this July in more than 20 countries.
In an earnings call, Amazon Chief Financial Officer Brian Olsavsky said higher inflation, fuel prices and labor restrictions added $2 billion to costs compared to last year.
“The cost of shipping a container abroad has more than doubled compared to pre-pandemic rates,” he said. “The cost of fuel is about one and a half times higher than it was a year ago.”
The emergence of the Omicron variant towards the end of 2021 caused “a substantial increase” in the number of employees going on furlough, prompting Amazon to increase hiring to make up for the absences, Olsavsky said. But as workers returned when variances dwindled, “we quickly went from understaffed to overstaffed,” he added. That resulted in “lower productivity” that added another $2 billion in costs, he said.
A separate Amazon union election in Bessemer, Alabama, also recently concluded with results too close to announce.
Both union efforts grew out of worker frustrations with Amazon’s treatment of workers amid the pandemic and were also motivated in part by increased national attention to issues of racial justice and labor rights.
Reference-www.cnn.com