Skip to main content
https://www.highperformancecpmgate.com/rgeesizw1?key=a9d7b2ab045c91688419e8e18a006621

Amazon pegs COVID-19 costs at an estimated $4 billion next quarter

Amazon expects to incur $4 billion in COVID-related costs next quarter, an estimate that provides a bellwether for other businesses, large and small, trying to stay operational and control expenses amid the pandemic.

The upshot: Amazon is planning for COVID to remain an unwelcome companion through the end of the year with costs higher than the previous quarter.

The company said Thursday in its third-quarter earnings call that it logged $7.5 billion in COVID-related costs since the disease took root earlier this year. Amazon previously said its COVID costs were about $600 million in the first quarter and more than $4 billion in the second. The company’s COVID costs in the third quarter were about $2.5 billion, CFO Brian Olsavsky told an analyst during an earnings call. While Amazon was able to lower its costs in the third quarter due to efficiencies that number is on rise for next quarter.

Olsavsky said the majority of the increase in costs is due to the expansion of its operations. Amazon has hired 100,000 new workers in October.

Amazon crushes Q3 expectations even without Prime Day bump

COVID-19 along with other uncertainties related to the economy, holiday sales and even weather patterns weighed on its guidance for operating income in the fourth quarter. Amazon provided a wide-ranging guidance of between $1 billion and $4.5 billion in operating income in the fourth quarter compared with $3.9 billion in the same period last year.  This guidance assumes about $4 billion of costs related to COVID-19.

But what is most telling is that even after providing a lengthy list of possible uncertainties in the fourth quarter, Olsavsky noted that COVID still trumps them all.

“So there’s a whole host of issues that generally come to bear in Q4,” Olsavsky said. “I think the fact that COVID is dwarfing all of those is causing us a lot of uncertainty on our top line range.”

Olsavsky said costs were related to productivity losses caused by changing how it operates as well as expenses related to personal protective equipment and other upfront costs.

“The largest portion of these costs relate to continuing productivity headwinds in our facilities, including process revisions to allow for social distancing and incremental costs to ramp up new facilities, and the large influx of new employees hired to support strong customer demand also includes investments in PPE for employees and enhanced cleaning of our facilities,” Olsavsky said during Thursday’s earnings call.

Amazon said Thursday it also continues to ramp up its in-house COVID-19 testing program with capacity reaching 50,000 tests a day across 650 sites by November.

Comments

Post a Comment

Popular posts from this blog

Uber co-founder Garrett Camp steps back from board director role

Uber co-founder Garrett Camp is relinquishing his role as a board director and switching to board observer — where he says he’ll focus on product strategy for the ride hailing giant. Camp made the announcement in a short Medium post in which he writes of his decade at Uber: “I’ve learned a lot, and realized that I’m most helpful when focused on product strategy & design, and this is where I’d like to focus going forward.” “I will continue to work with Dara [Khosrowshahi, Uber CEO] and the product and technology leadership teams to brainstorm new ideas, iterate on plans and designs, and continue to innovate at scale,” he adds. “We have a strong and diverse team in place, and I’m confident everyone will navigate well during these turbulent times.” The Canadian billionaire entrepreneur signs off by saying he’s looking forward to helping Uber “brainstorm the next big idea”. Camp hasn’t been short of ideas over his career in tech. He’s the co-founder of the web 2.0 recommendatio
Post a Comment
Read more

Drone crash near kids leads Swiss Post and Matternet to suspend autonomous deliveries

A serious crash by a delivery drone in Switzerland have grounded the fleet and put a partnership on ice. Within a stone’s throw of a school, the incident raised grim possibilities for the possibilities of catastrophic failure of payload-bearing autonomous aerial vehicles. The drones were operated by Matternet as part of a partnership with the Swiss Post (i.e. the postal service), which was using the craft to dispatch lab samples from one medical center for priority cases. As far as potential applications of drone delivery, it’s a home run — but twice now the craft have crashed, first with a soft landing and the second time a very hard one. The first incident, in January, was the result of a GPS hardware error; the drone entered a planned failback state and deployed its emergency parachute, falling slowly to the ground. Measures were taken to improve the GPS systems. The second failure in May, however, led to the drone attempting to deploy its parachute again, only to sever the line
Post a Comment
Read more

How the world’s largest cannabis dispensary avoids social media restrictions

Planet 13 is the world’s largest cannabis dispensary. Located in Las Vegas, blocks off the Strip, the facility is the size of a small Walmart. By design, it’s hard to miss. Planet 13 is upending the dispensary model. It’s big, loud and visitors are encouraged to photograph everything. As part of the cannabis industry, Planet 13 is heavily restricted on the type of content it can publish on Instagram, Facebook and other social media platforms. It’s not allowed to post pictures of buds or vapes on some sites. It can’t talk about pricing or product selection on others.   View this post on Instagram   A post shared by Morgan Celeste SF Blogger (@bayareabeautyblogger) on Jan 25, 2020 at 7:54pm PST Instead, Planet 13 encourages its thousands of visitors to take photos and videos. Starting with the entrance, the facility is full of surprises tailored for the ‘gram. As a business, Planet 13’s social media content is heavily restricted and monito
3 comments
Read more