Covid-19 to cost Amazon at least $ 4 billion

Washington

Amazon's online ordering and home delivery model may seem ideal to millions of confined consumers. On the other hand for its inventor, Jeff Bezos, the boss of the leader of the commerce on the internet, this model must be adapted urgently: the risk of contagion of Covid-19 for its employees indeed represents an unexpected and expensive sanitary and logistical challenge.

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The shareholders, generally indulgent, of Amazon are therefore warned. From April to June, the company can either earn $ 1.5 billion or lose as much, says its chief financial officer. It is disappointing coming from this incredible machine which posted its strongest increase in activity since the end of 2012. Especially since Amazon, while most department store chains put their employees on temporary unemployment, has just hired 175,000 more people.

Supply

Criticized by unions and political circles in many countries, sanctioned by justice in France, Amazon seems to take seriously the additional responsibility that gives it the prospect of being still for months one of the main channels of supply of essential products millions of people de facto semi-confined and converted to telework.

To protect its employees, who are now close to a million, Amazon will spend at least $ 4 billion. The colossal investment " includes personal protective equipment, reinforced cleaning means on our sites, less efficient processes that will allow effective social distancing, higher wages for our hourly paid teams, and hundreds of millions to develop our own capabilities to test for Covid-19 contamination, ”explains Jeff Bezos. The latter reassigned to this mission dozens of engineers hitherto occupied otherwise.

100 million masks

" If you are shareholders of Amazon, you may want to sit down, because we do not think we are acting on a small scale, " warns the boss of the second private employer in the United States, behind Walmart. Despite Wall Street's violent plunge since March, Amazon's market capitalization has risen more than 30% since the start of the year and exceeds $ 1.2 trillion. The initial reaction of shareholders Thursday evening to the warning of Jeff Bezos was relatively calm. The price of Amazon fell only 4.5% on the over-the-counter market, after the close of the Nasdaq.

The company has already purchased 100 million masks and continues to acquire more, as they will need to be worn by all of its employees, drivers and operational staff. Amazon also bought more than 1,000 thermal cameras and 31,000 thermometers, not only for Amazon employees but also for those of its subsidiary, Whole Foods, a high-end food supermarket chain bought in 2017.

The Covid-19 crisis has already affected Amazon port costs by complicating its distribution chain. They even soared 49% in the first quarter to reach nearly $ 11 billion.

In addition, Amazon Web Services (AWS), the group's subsidiary specializing in cloud computing services , reports sales of $ 10.2 billion from January to March. This represents a gain of 33%, slightly lower than expected. But AWS generates $ 3.08 billion in profits in the first quarter, which confirms its status as the group's profitability engine since the latter only displays $ 2.53 billion in consolidated net profits.