Amazon reports profit surge to 9.9 billion dollars as sales grew

Online retail colossus Amazon on
Thursday reported profit of 9.9 billion dollars in the recently ended quarter on
growing sales and more efficient deliveries.

Sales reached 143.1 billion dollars in the recently ended quarter, up 13 percent
from the same period last year, according to Amazon.

“We had a strong third quarter as our cost to serve and speed of delivery
in our Stores business took another step forward,” said Amazon chief executive
Andy Jassy, adding its ad business grew “robustly” and AWS cloud computing
business “continued to stabilize.”

Amazon earnings “soared past expectations” in the quarter, according to
Insider Intelligence analyst Zak Stambor.

“The retail giant’s slowdown last year appears to be in the rearview mirror
as it has embarked on significant cost-cutting throughout this year and
sharpened its focus on key growth areas, such as its high-margin online
marketplace and advertising,” Stambor said.

A top US antitrust regulator sued Amazon in September, accusing the online
retail behemoth of running an illegal monopoly by strong-arming sellers and
stifling potential rivals.

“Our complaint lays out how Amazon has used a set of punitive and coercive
tactics to unlawfully maintain its monopolies,” said Federal Trade Commission
Chair Lina Khan.

Robots and drones

Amazon said Thursday it will hire 250,000 full-time, part-time and seasonal
employees in the United States to handle shopping demand in the months ahead.

The e-commerce star added that it will invest 1.3 billion dollars to bump up the
average hourly wage for delivery and fulfillment jobs to more than $20.50.

Amazon said last week that it will expand drone delivery of certain
purchases to a third US state as well as to Britain and Italy by the end of
2024.

Amazon delivery drones are already at work in California and Texas, and a
new model will be able to operate in more extreme weather conditions than
those currently in use, Amazon Prime Air vice president David Carbon said
during a marketing event.

Amazon has also installed a new robotics system in one of its Texas
logistics centers, featuring technology like automated vehicles, mechanical
arms and computer vision technology.

Amazon already uses 750,000 robots in its warehouses to speed up deliveries.
“The better they get at delivery, the more it continues to grow the
e-commerce market overall and Amazon’s place within that market,” said Insider
Intelligence analyst Andrew Lipsman.

But increased productivity via robots won’t fix underlying Amazon worker
issues, critics say.

“It’s not going to change their logic. And their logic is ‘Use these
workers up and throw them away’,” said Sheheryar Kaoosji, executive director
of the Warehouse Worker Resource Center, a nonprofit dedicated to improving
warehouse industry conditions in southern California.

Amazon early this year eliminated some 27,000 jobs in a move it said at the
time was necessary, after years of sustained hiring.

Ads shine

Advertising continues to be “a major bright spot” for Amazon and it has
started using generative artificial intelligence to help sellers create
“eye-catching” ads in its online marketplace, analyst Stambor said.

Insider Intelligence expects Amazon US advertising business to bring in
nearly 34 billion dollars this year in a major leap from before the Covid-19 pandemic.

But while Amazon Web Services (AWS) profit was up in the quarter compared
to the same period a year earlier, the unit’s growth lagged that reported for
the quarter by rival cloud businesses operated by Microsoft and Google.

Amazon just weeks ago said it would invest up to 4 billion dollars in AI firm
Anthropic, as it steps into an AI race dominated by Microsoft, Google and
OpenAI.

The success of OpenAI’s ChatGPT, a chatbot released last year that is able
to generate poems, essays and other works with just a short prompt, has led to
billions being invested in the field.

Anthropic agreed to use Amazon’s chips to develop its next models and to
use AWS for “mission critical workloads.”

Amazon has already announced it aimed to soup up its Alexa voice assistant
with generative AI, which the firm said would allow users to have smoother
conversations.(AFP)