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Amazon’s profits weighed down by $6b in COVID-19 costs


“But these aren’t normal circumstances. Instead, we expect to spend the entirety of that $US4 billion, and perhaps a bit more, on COVID-related expenses getting products to customers and keeping employees safe.”

“If you’re a shareowner in Amazon, you may want to take a seat, because we’re not thinking small,” he said.

Amazon forecast operating income in the range of a loss of $US1.5 billion and profit of $US1.5 billion for its second quarter. Analysts were expecting operating income of $US3.80 billion, according to research firm FactSet.

If you’re a shareowner in Amazon, you may want to take a seat, because we’re not thinking small.

Jeff Bezos

The company forecast net sales in the range of $US75 billion to $US81 billion for the second quarter. Analysts were expecting revenue of $US78 billion, according to IBES data from Refinitiv.

Net sales rose to $US75.5 billion from $US59.7 billion in the March quarter, as the retail giant recorded a surge in demand for online orders of essential goods during the COVID-19 pandemic. Analysts had expected revenue of $US73.6 billion, according to IBES data from Refinitiv.

Amazon continues to struggle to meet the huge demand from Americans and international customers, many of whom have remained at home for more than a month as the coronavirus pandemic spreads.To unclog its network, Amazon has prioritised stocking and delivering items deemed most essential and raced to add more staff.

Restive workforce

The online behemoth has also had to confront restive warehouse and delivery workers who have raised concerns that the company hasn’t done enough to protect them from contracting the virus.

As employees at dozens of its facilities have tested positive for COVID-19, ,some workers complained about Amazon policies that push them to meet the per-hour rate at which the company wants orders fulfilled, fearing the practice discourages safe sanitary practices such as washing hands after a cough or sneeze.

Other employees complained about “stand-up” meetings, where workers stand shoulder-to-shoulder at the start of each shift.

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Since then, Amazon modified policies, ending the stand-up meetings. It’s also begun to hand warehouse staff face masks and checked their temperatures at the start of shifts, sending workers home for three days if they register 38 degrees celsius or more.

Amazon has repeatedly defended its treatment of workers, saying it’s ramped up cleaning its facilities and procuring personal protective equipment, and it’s noted that the vast majority of employees continue to show up for work every day.

Amazon has fired some of the activists, while workers continue to press for better benefits and improved conditions. It’s also begun airing commercials, praising its warehouse and delivery staff as front-line “heroes” in the pandemic crisis.

Reuters/The Washington Post

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