Amazon: Sales surge while spending rises
Amazon has revealed that sales rocketed 26% to $75.5bn (£60.1bn) in the first quarter of the year, with a possibility of rising 28% in the next quarter.
Despite the boom in sales, net income still fell 29% to $2.5bn (£1.9bn) in the period following increased spending, with shipping costs alone surging 49% to nearly $11bn (£8.7bn).
It comes as Jeff Bezos, CEO and founder of the group, warned shareholders to “take a seat” as the group now expects to spend $4bn (£3.2bn) on pandemic-related expenses in the next quarter.
He added that “under normal circumstances”, the retailer would expect to generate the $4bn in operating profit, but this profit will now be used to “get products to customers and keep employees safe”.
In its latest update, the retail giant outlined what measures are being put in place to protect customers and employees amid the ongoing pandemic.
This includes investments in personal protective equipment, an enhanced cleaning of its facilities, and “less efficient” process paths to allow for social distancing.
The group also plans to invest “hundreds of millions” to develop its own Covid-19 testing capabilities.
Meanwhile, hourly pay for UK employees has increased to £2/hr, and the group has also procured 100 million face masks, 1,000 thermal cameras and 31,000 thermometers to help protect and monitor employees.
An additional 175,000 employees have also been hired in its fulfillment and delivery network in response to increased customer demand.
In the latest trading update, Bezos added: “From online shopping to AWS to Prime Video and Fire TV, the current crisis is demonstrating the adaptability and durability of Amazon’s business as never before, but it’s also the hardest time we’ve ever faced.
“Providing for customers and protecting employees as this crisis continues for more months is going to take skill, humility, invention, and money.”
He continued: “There is a lot of uncertainty in the world right now, and the best investment we can make is in the safety and well-being of our hundreds of thousands of employees.
“I’m confident that our long-term oriented shareowners will understand and embrace our approach, and that in fact they would expect no less.”
