• December 2, 2022

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It’s time to “batten down the hatches” according to Amazon Chair, Jeff Bezos who has recently taken to his Twitter account to highlight his thoughts on the weakening global economy.

Whilst Amazon saw a significant business benefit from the pandemic and the rise in online shopping and services, there has been a downward shift as consumers faced with a cost of living crisis have curtailed their spending.

The company’s overall sales in the three months to September rose by 15% year-on-year to $127.1 billion, with sales in North America growing by 20%. Yet it has seen a different story ‘across the pond’ with a reduction of its international business and a dip in demand for cloud-services.

August and September were weaker months for Amazon, especially in Europe where consumers are facing restricted spending power as they budget to meet the rising costs of essentials such as food and fuel.

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“We’re very optimistic about the holiday but we’re realistic that there are various factors weighing on people’s wallets”, explained Amazon’s Chief Financial Officer, Brian Olsavsky. This forecast about festive spending certainly spooked the markets with shares dropping close to 20% in after-hours trading on Thursday.

Amazon has announced a hiring freeze as well as the intention to lease out some of its warehouse space in order to mitigate the impact. The company is nonetheless expecting a vast revenue for the forth quarter (between $140 billion and $148 billion) with growth anticipated somewhere between 2 and 8%.

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chief executive Andy Jassy said in a statement: “There is obviously a lot happening in the macroeconomic environment, and we’ll balance our investments to be more streamlined without compromising our key long-term, strategic bets.

“What won’t change is our maniacal focus on the customer experience, and we feel confident that we’re ready to deliver a great experience for customers this holiday shopping season.”

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