Amazon has reported its first unprofitable year since 2014, after losing $2.7 billion in 2022. The company announced the Q4 2022 results in its blog post. Earlier this month, the e-commerce giant announced that it will let go of more than 18,000 employees as a part of the company’s annual planning process, Chief Executive Andy Jassy. The drop in the company’s revenue comes despite holiday season sales growth of 9 per cent.
According to the company’s Q4 2022 earnings, net sales were up 9 percent year over year, surpassing the company’s prediction of growth between 2 and 8 percent year over year.
Amazon attributed a part of the loss to its massive investment in the electric automaker Rivian as the carmaker’s value went down last year, affecting e-tailer’s revenue. Amazon has a 20 per cent stake in Rivian and has already started the company’s electric delivery vans. In 2022, the carmaker’s stock price dropped 82 per cent as it made pricing mistakes and fell short of its growth targets.
According to reports, Amazon has halted growth for its Amazon Go and Amazon Fresh stores. The company acquired Whole Foods in 2017. It further plans to close some stores as it works to refine the format, CEO said on Thursday.
“It’s important to remember that over the last few years, we took a fulfillment-center footprint that we built over 25 years and doubled it in just a couple of years,” Jassy said. He further added, “we at the same time built out a transportation network, for last mile, roughly the size of UPS. … Just to get those functional, it took everything we had.”
In the fourth quarter of 2021, Amazon saw an $11.8 billion valuation gain from its investment.