To avoid holiday shipping delays, Amazon will spend “several billion dollars.”Visual Media Factory
Amazon, like you, wants to avoid holiday shipping delays. The company announced today that it will spend “multiple billions of dollars” to avoid problems during the holidays, which could include everything from product delivery issues to keeping items in stock. The funds will be used to increase worker pay, reduce shipping costs, and address supply chain issues.
Amazon CEO Andy Jassy said today in the company’s third-quarter earnings release, “It’ll be expensive for us in the short term, but it’s the right prioritization for our customers and partners.”
The big-spending serves as a promise as well as a warning. Investors were disappointed by Amazon’s earnings, which saw a significant drop in quarterly profits from the previous year. This is largely due to higher spending across the board the company spent $3.8 billion more on fulfillment, $3.3 billion more on tech costs, and $2.6 billion more on marketing, to name a few — which ate into the quarter’s $110.8 billion in revenue, up 15% from the previous year.
Jassy, who took over as CEO on July 5th, explained that these costs were necessary in order to provide good service to customers. “We’ve always said that if we have to choose between short-term profits and doing what’s best for customers in the long run, we’ll choose the latter,” he said. “Extraordinary investments across our businesses to satisfy customer needs,” Jassy said of the costs.