Amazon Reports Its First Unprofitable Year Since 2014 (npr.org) 27
Amazon is reporting its first unprofitable year since 2014. NPR reports: Amazon lost $2.7 billion last year, the company said on Thursday. This was despite holiday-season sales growing 9%. Amazon's shares fell in after hours trading. By far, the biggest culprit for Amazon's losses over the year was the company's hefty investment in the electric automaker Rivian whose value plummeted last year and ate into Amazon's bottom line.
Amazon had taken a 20% stake in Rivian and has begun rolling out the carmaker's electric delivery vans. Rivian wanted to replicate Tesla's success and held one of the largest initial public offerings in U.S. history. But last year, the exuberance faded, the carmaker made pricing missteps and it fell short of growth targets. Its stock price dropped 82%. For Amazon, the loss on its investment comes right when it contends with the need to recalibrate after a pandemic-era upsurge.
During the pandemic, the appetite for online shopping seemed to promise exponential growth, and many believed the habit changes could be permanent. Amazon couldn't hire and built warehouses fast enough; its profits doubled and kept growing. But then people returned to physical stores, switched from cocooning to travel and outings, and eventually got more hesitant to spend as inflation rose. Last month, Amazon announced it expected to cut 18,000 jobs, or about 5% of the corporate workforce. CEO Andy Jassy, in a blog post, referenced "the uncertain economy" and the company's pandemic-era hiring spree. At the peak, in late 2021-early 2022, Amazon employed more than 1.6 million part-time and full-time workers globally. Thursday's financial report shows that number is now down to 1.5 million.
Amazon had taken a 20% stake in Rivian and has begun rolling out the carmaker's electric delivery vans. Rivian wanted to replicate Tesla's success and held one of the largest initial public offerings in U.S. history. But last year, the exuberance faded, the carmaker made pricing missteps and it fell short of growth targets. Its stock price dropped 82%. For Amazon, the loss on its investment comes right when it contends with the need to recalibrate after a pandemic-era upsurge.
During the pandemic, the appetite for online shopping seemed to promise exponential growth, and many believed the habit changes could be permanent. Amazon couldn't hire and built warehouses fast enough; its profits doubled and kept growing. But then people returned to physical stores, switched from cocooning to travel and outings, and eventually got more hesitant to spend as inflation rose. Last month, Amazon announced it expected to cut 18,000 jobs, or about 5% of the corporate workforce. CEO Andy Jassy, in a blog post, referenced "the uncertain economy" and the company's pandemic-era hiring spree. At the peak, in late 2021-early 2022, Amazon employed more than 1.6 million part-time and full-time workers globally. Thursday's financial report shows that number is now down to 1.5 million.
Proof that Amazon lost its innovation (Score:1)
You could tell that Amazon lost its innovation, because every other tech startup is referring to "the uncertain economy" as "the macroenvironment", LOL. Amazon has to get with the lingo.
Re:Proof that Amazon lost its innovation (Score:5, Insightful)
However that doesn't particularly indicate a problem with their core business of retailing. I don't even thing it spells doom for Rivian, which is still progressing - a lot of valuation just disappeared out of some incredibly high-priced companies and Rivian is one of them.
First year since 2014? (Score:1)
You could tell that Amazon lost its innovation, because every other tech startup is referring to "the uncertain economy" as "the macroenvironment", LOL. Amazon has to get with the lingo.
Some other companies never had any innovation to lose!
That grammar guy & associates companies were never profitable since 2014! They invested a fortune in "get rich quick" recipes and howtos but neither their Amazon affiliate link programs or their long revenue stream scams were ever profitable since inception almost 10 years ago now!
Re: (Score:1)
But hey... at least space dick boy got to throw billions at his phallic shaped accomplishment!
FFS, you people keep acting as though every CEO should slash their salaries and give it to the employees... But, here we have Blue Origin...a company created by one of those CEO's, that creates jobs and salaries for people. It is, and has been a money losing proposition for Bezos...so, that sure sounds like a form of welfare/jobs project that benefits it's employees....does it not? Is that all invalidated, just because something is produced?...or because the employees have to show up for work?
Ohhhhh....b
Maybe they should clean up their products (Score:5, Insightful)
A not insignificant reason for this is because people don't trust their products anymore. Used to be you could go to Amazon and be reasonably sure the thing you were getting would be at least the quality you would expect of a product from Walmart. Not anymore.
Re:Maybe they should clean up their products (Score:4)
It wouldn't hurt if they improved their shipping speeds and AWS support response times as well. Both of them seem to have gotten a lot worse after the pandemic started, and never recovered.
Re: (Score:2)
Yeah, the whole Prime situation with two day shipping in now a thing of the past. As the price for Prime increased, the shipping became slower and slower. To the point where most expected arrivals are now anywhere from five to fourteen days after you click "buy." Add to that that searching for products now requires a google search, because Amazon search is utterly and completely broken, on purpose, to shove sponsored knock-offs at you instead of what you actually searched for, and it makes one wonder how mu
Re:Maybe they should clean up their products (Score:5, Insightful)
Product reliability is one part, but the sponsored results is a bigger hurdle for me. I can't find what I am looking for. Amazon needs to pick who their customer is.
Re: (Score:3)
Amazon blew shipping on every item I ordered in December and most of those I ordered in November. One Prime item - allegedly in stock - was ordered on a pre-Thanksgiving sale and was (re)scheduled (after four changes) to arrive at
Re:Maybe they should clean up their products (Score:4, Insightful)
They are also trying to do too much:
* appliance manufacturer, in which they suck (low quality products; Echo/Alexa sell well but search feature is bad)
* a marketplace, in which they suck (overwhelmed by scammers; review system not helpful; relevant products difficult to find)
* a next-day delivery service using trucks and gig workers; in which criticism has mounted recently
* an innovative delivery service company (drones)
* a grocery store
* an e-book reader manufacturer and e-book distributor
* a cloud service provider
* a surveillance camera service provider
* an entertainment company making billion dollar productions
They are serious with AWS, but why would I subscribe cloud services to a company that can go bankrupt if some movie does not get good reviews?
Not trying to miss a chance to hate Amazon, but: (Score:3)
Not for no reason. We're in a recession, with high inflation, right on the heels of a couple of unexpected boom years for the direct to home product delivery industry. A downturn (bust year) in sales and profits was probably unavoidable.
They've operated in prior years with no profit, so this is unlikely to signal their death knell, though their ongoing predilection for cheap over quality could certainly be their undoing.
Re: (Score:2, Insightful)
Was it intentional? (Score:4, Interesting)
I am on the fence. Is this headwinds and failure on their end?...or a strategic ploy to reduce their prices, improve their service, and wound their best competitors in the middle of a painful recession? I can see both scenarios as equally probable. If they're going the sinister route, I look forward to them making their site pleasant again...or at least cheaper.
What about the $1B wasted on... (Score:5, Insightful)
Rings of Power? Such an epic flop with a hefty price tag surely didn't help.
Re: (Score:1)
Ah, but they also stopped someone else from doing it better and taking still more viewers away from their platform. That's Amazon's whole model — suck all the air out of the room.
Re: (Score:2)
this is compounded by their purported losses on Amazon Alexa
Yeah, Amazon has a problem. (Score:5, Insightful)
just Wow. (Score:2)
Of course they claim that (Score:2)
Same bullshit tactic lots of companies use to avoid paying taxes. One division loses some money, and the others make a ton. The FTC needs to break their shit up badly so each sub-business has its own accounting responsibility.
Pay your fucking taxes, Amazon.
I don't buy it (Score:2)
Amazon "losing money" sounds like a PR stunt to reduce government oversight. They have so much control over the consumer market for so many products...