The New York Times headline read, “Amazon Reports Almost No Profit and Slowing Growth.” The newspaper mentioned that the situation would not improve this quarter. Amazon’s serious problems began when Chief Executive Officer Andy Jassy took over in July 2021. It is hard to understand why long-time CEO and billionaire Jeff Bezos does not return to run one of the largest companies in the world.
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Revenue in the final quarter across the entire company grew by 9% to $149.2 billion. It was a disappointment for what has been one of America’s great growth companies. Net income was $278 million, down from $14.3 billion in the same period in 2021. (Click here for the companies making the most profit per second.)
Amazon’s two huge legacy businesses lost money in the quarter. North American e-commerce lost $240 million on $93.4 billion. International e-commerce lost $2.2 billion on $34.3 billion. The only operation that saved Amazon’s bottom line was the AWS cloud operation, which posted a profit of $5.2 billion on revenue of $21.3 billion. Unfortunately, that profit did not move from the year before. Cloud computing is Amazon’s future, so the number should cause investor anxiety. And Amazon said AWS growth would be a challenge in 2022.
Jassy is trying to balance customer service with cost cuts. What is left out of that equation is that he overbuilt the e-commerce infrastructure, which has been the primary cause of Amazon’s bottom-line problems. His role in this is not something he has admitted entirely.
Amazon’s investors have not been hurt as badly as the 18,000 people it laid off. However, they have been bloodied. After a recent recovery, Amazon is still down 23% in the past year. The new results will push it down even further.
Amazon has to be fixed. Jassy cannot do it. That leaves Jeff Bezos.
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