Amazon's earnings highlight a fairly positive quarter for Big Tech despite heavy discounts

What you need to know

• Amazon reported its fiscal first-quarter earnings on Thursday.
• The company reported revenue of $127.4 billion, up 9% from the same period in 2022.
• Amazon recently announced two rounds of job cuts, as well as closing its Halo product line.

Amazon posted a positive quarterly high after reporting $127.4 billion in revenue Thursday. This represents an increase of 9% over the first quarter of 2022 and is the result of increased net sales and improvements across the Company’s business.

“There’s a lot to like about how our teams deliver to customers, especially in an uncertain economy,” Amazon CEO Andy Jassy said in a statement.

“Our store business continues to improve cost of service in our fulfillment network while increasing the speed at which we get products into customers’ hands (we expect to have our fastest Prime delivery speeds ever in 2023).”

Jassy also praised Amazon’s advertising business, which rose 23% to $9.5 billion, a notable increase as competitors like Alphabet and Meta suffer from lower ad spending.

However, despite improvements at AWS and other companies, like other big tech companies, Amazon is managing the impact of the pandemic’s mass hiring of employees. The company announced multiple layoffs, cutting 18,000 jobs earlier this year and losing an additional 9,000 jobs in the latest cuts.

The cuts mirror similar moves by Meta and Alphabet, which reported higher-than-expected revenue last quarter as they push to make companies more efficient.

As part of Amazon’s efforts, the company announced just a day before it released its first-quarter financials that it was shutting down the Halo brand, which consists of fitness trackers and other devices like the still fairly new Halo Rise. The company cited “significant headwinds” and an uncertain economic environment for the decision to cancel the division. Amazon also blames the crowded space as it competes with devices from Fitbit, Garmin, Xiaomi, and more.

Amazon will likely feel some of the financial burden from the recalls it will have to issue to customers and the support it will provide to affected employees. Support for Halo products ends on July 31, and health data will be deleted after August 1.

Updating…

Source link