A Blog by Jonathan Low


May 3, 2020

Amazon Was Caught Unawares By Covid-19. The Fix Is Going To Be Expensive

Amazon is both the primary beneficiary - and the primary target - of public reaction to the pandemic. It's revenues are surging, it is hiring hundreds of thousands of new workers - but as many of its workforce sicken from the virus, the company's seeming indifference to worker safety, which may threaten customer safety, is causing it to rethink its strategy.

That Congress has demanded Bezos, alone of corporate executives, testify before it, despite the now well-reported culpability of meat packing and cruise line execs, among others, suggests that he and the company are perceived as an attractive bi-partisan target in an election year. And customers are beginning to complain about delivery delays, possibly rendering them less willing to rise to Amazon's defense. Sacrificing profits, as he has done before, may be worth the cost if it forestalls a mandatory Amazon breakup. JL

Cat Zakrzewski reports in the Washington Post:

The pandemic drove a 26% rise in first-quarter sales covering January through March as worried shoppers increased their online spending. But profits declined 29%. The company might have generated up to $4 billion in profit in the current quarter. But Bezos said Amazon might spend the entirety of that – and perhaps more. The company wasn't prepared for unprecedented demand for household staples or groceries. At the same time, the virus presents a new safety threat to Amazon workers, and the company is facing a tide of worker activism pushing for better protections. 
Amazon is warning investors that it’s spending big to address the coronavirus pandemic. 
“If you’re a shareowner in Amazon, you may want to take a seat, because we’re not thinking small,” Amazon chief executive and Washington Post owner Jeff Bezos said in a statement.


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