Jeff Bezos's Replacement Says Amazon Will Spend Billions to Combat Holiday Shipping Delays
The company is taking costly preventative measures in the face of the supply-chain slowdown.
Confronted with a major supply-chain slowdown that will cause widespread shipping delays this holiday season, Amazon intends to spend billions of dollars to get ahead of the issue.
The retail giant has experienced massive growth since Covid-19 lockdowns led more consumers to turn to online shopping. From April 2020 to March 2021, the company saw $26.9 billion in profit; for comparison, it brought in $24.7 billion from 2017 to 2019.
Despite the continued increase in revenue, the rate of Amazon's growth has slowed. Sales were up 15% to $110.8 billion in the third quarter while those of the quarter prior were up 27%.
In the company's third-quarter earnings release on Thursday, Amazon CEO Andy Jassy discussed the company's vision: "In the fourth quarter, we expect to incur several billion dollars of additional costs in our consumer business as we manage through labor supply shortages, increased wage costs, global supply chain issues, and increased freight and shipping costs."
This is Jassy's first quarter as Amazon's CEO since founder Jeff Bezos stepped down earlier this year.
"It’ll be expensive for us in the short term," Jassy said of the increased spend, "but it’s the right prioritization for our customers and partners."