This week’s stock-based roundup is on Amazon. On Friday, November 25, thousands of Amazon warehouse workers in some 40 countries participated in protests and strikes, which coincided with Black Friday sales; one of the busiest days of the year for online trading.
The campaign dubbed “Make Amazon Pay” accuses Amazon of squeezing every last drop it can out of workers, communities and the planet in the face of the cost of living crisis and therefore demanded better wages and working conditions. The workers’ charges include Amazon’s attack on workers trying to organize unions, high-level surveillance in warehouses to speed up work and workers not having break times.
Tension with workers has been a longstanding problem at the e-commerce giant, which has faced allegations of unfair labor practices, as well as employee activism and union campaigns at some facilities.
Amazon, like the rest of Big Tech, has had a rough year when it comes to macroeconomic headwinds, skyrocketing inflation and rising interest rates. Amazon’s core retail business has been hit hard, as consumers returned to shopping in stores.
The company reported its third-quarter earnings on October 27 and, following missed revenue estimates and a disappointing fourth-quarter sales forecast, its shares plunged 13% in extended trading on October 27 and between October 25. October and November 3, 2022, fell 26%. .
On November 9, shares fell 4.3%, bringing the company’s market value to $879 billion compared to a record close of $1.88 trillion in July 2021, thus becoming the world’s first public company to lose a trillion dollars in market value amid broader brutal technology. liquidation caused by inflation and disappointing earnings.
In the third quarter of 2022, revenue grew 15%, marking a return to double-digit sales expansion, but still missing Wall Street projections. Operating income decreased to $2.5 billion in the third quarter, compared to $4.9 billion in the third quarter of 2021, while net income decreased to $2.9 billion in the third quarter, or $0.28 per diluted share, compared to $3.200 million or $0.31 per diluted share. , in the third quarter of 2021.
The company said it expects to post fourth-quarter revenue of between $140 billion and $148 billion, representing year-over-year growth of 2% to 8%. But analysts expected sales to hit $155.15 billion.
The disappointing third-quarter result is the second time this year that the company’s results have been disappointing. In April, a weak forecast for the second quarter caused a 14% drop in the share price.
The company linked the disappointing performance to macroeconomic headwinds. Chief Financial Officer Brian Olsavsky said on an earnings call: “The continued impacts of large-scale inflation, rising fuel prices and rising energy costs have weighed on our sales growth as we Consumers assess their purchasing power and organizations of all sizes assess their spending on technology and advertising.”
The company has responded to increased spending by tightening its belt and aggressively cutting costs. Like Walmart, it has begun shuttering its modern locations, closing several warehouses, cutting its workforce and abandoning several of its expansion plans.
The company closed nearly 68 retail stores, 66 of them located in the United States; end Amazon E-books, 4-star and Pop Up stores, which sell a variety of electronic devices.
Six of its Whole Foods grocery operations are scheduled to close. Whole Foods is one of its most successful business models acquired in 2017. It makes up the majority of Amazon’s grocery operations with more than 500 locations across the United States.
The company also announced that it will scrap plans to build dozens of warehouses in the United States. Reportedly, 71 stores have already been closed this year.
In the second quarter, Amazon revealed plans to reduce its workforce by 99,000 employees after consumers began to stop spending discretionary. A couple of weeks ago, the e-commerce giant announced that it will start laying off around 10,000 employees this month.
Its billionaire founder, Jeff Bezos, recently shared an ominous warning, telling consumers and business owners that tough times are ahead. He advised people to start putting off shopping and save money to navigate downtime. He warned that this may not be the right time for workers to spend their annual bonuses, especially on big purchases like cars, big screen TVs, etc.
With warnings from its billionaire founder, worker protests, disappointing third-quarter earnings, coupled with the company’s decision to lay off 10,000 employees, the numbers are bleak and the outlook even bleaker. Indeed, this is a challenging period for the e-commerce giant.
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