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Amazon stated that it will invest several billion dollars in managing supply chain problems and labor shortages during Christmas.

Online retailer giant Amazon said that it would do everything it could to reduce the negative effects on both customers and sellers.

The warning came as it revealed its net income had dropped to $3.2bn (£2.3bn) in the third quarter, compared to £6.3bn in 2020.

However, net sales rose by 15% to $110.8 Billion according to the company.

Andy Jassy is Amazon’s chief executive. He stated that Amazon expects to incur “multiple billions of dollars in additional costs” due to labor supply shortages, wage increases, supply chain problems, higher freight costs and rising shipping and freight costs.

He said, “It will be costly for us in short-term but it is the right prioritisation of our customers and partners.”

We have always believed that, when faced with the decision between optimizing for short-term profit or what is best for our customers in the long-term, we choose the former – as you can see during this epidemic.”

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  • Amazon offers £3,000 bonuses to attract staff

As economies recover from the coronavirus lockdown, businesses around the globe have struggled with supply chain issues and shortages.

The global shortage of chip supplies is slowing down production lines for many products such as smartphones, washing machines, cars and other consumer goods.

The surge in demand for goods including Amazon’s has caused increased congestion at ports across many countries. This is prompting retailers to raise alarm that delivery for holiday season may be delayed.

California, USA: Container ships have been clogging major ports in California for record numbers.

Amazon’s staffing issues has led to the retailer offering one-off payments of up to £3,000 in a bid to attract staff in UK regions where there is high demand for labour.

The festive season is a time when the firm hires for up to 20,000 roles across its UK network. This comes amid worries about worker shortages. It also began offering a £1,000 signing-on bonus to recruit permanent staff in some regions in August.

Pay for the temporary roles starts at a minimum of £10 per hour, rising to £11.10 in some parts of the UK.

Amazon was accused of having poor work conditions in both the UK (where it is second-largest employer) and the US (where it has been accused).

Reuters reported that Amazon’s Chief Financial Officer Brian Olsavsky said workers shortages have contributed to the inconsistent levels of staffing at his company.

The company had a primary staff capacity problem in its third quarter. This, he said, was also having an effect on other parts of the business.


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