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Amazon to spend ‘several billion’ to manage supply shortages

The company said the expenses will be used to manage through labor supply shortages, increased wage costs, global supply chain issues, and increased freight and shipping costs

Amazon has warned that it expects to incur “several billion dollars” of additional costs in the upcoming months as supply chain issues hit an all time high.

The company said the expenses will be used to manage through labor supply shortages, increased wage costs, global supply chain issues, and increased freight and shipping costs.

The warning comes amid its latest trading update for the three-month period ending September 30, 2021. It revealed net incomes dropped sharply to $3.2bn (£2.3bn) compared with $6.3bn (£4.5bn) in 2020.

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However, net sales still increased 15% to $110.8bn (£80.4bn) in the third quarter, compared with $96.1bn (£69.7bn) the previous year.

Andy Jassy, CEO, Amazon, said: “In the first several months of Covid-19, Amazonians played an essential role to help people secure the requisite PPE, food, and other in-demand items needed, and we worked closely with businesses and governments to leverage AWS to maintain business continuity as they responded to the pandemic.

“It’ll be expensive for us in the short term, but it’s the right prioritization for our customers and partners.”

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