Amazon remainders 1,300 staff
Expects profit by Q4 2001
Amazon is to make 1,300 people - 15 per cent of its staff - redundant. The job-cuts will cost it more than $150 million - now. In 2003 the e-tailer will issue an unspecified number of shares through a special trust fund to dumped staff. Which is nice... but a bit peculiar.
The job cuts are targeted at the US - the axe is swinging at on the suits in head office as well as the foot soldiers in distribution and customer services.
One warehouse is going in Georgia, and a customer service centre in Seattle will operate now only on a seasonal basis.. presumably, it'll stuff up with temps in the Christmas run-up. On the bright side for Amazon, fewer helldesk and warehouse operatives means fewer people pressing to join unions.
Amazon made the job cuts announcement today while announcing its Q4 results. Sales were up 44 per cent on 1999 ($676m) to $972m. The company appears to be getting the hang of this distribution/logistics thing - by increasing its stock turn rate, it reduced inventory 21 per cent on the prior year Q4 on greatly increased sales.
However, that wasn't enough to turn a profit. Pro forma net operating loss in Q4 was $60 million, or 6 per cent of net sales, Amazon points out (Q4 1999: pro forma operating loss of $175 million, - 26 percent of net sales). The company says it expects to move into operating profit in Q4, this year.
Net loss for the Q4 was pretty damn big at $545 million, with a hefty $339m writedown on torpedoed equity holdings.
For the full year, Amazon's net sales were $2.76 bn, a 68 per cent up on 1999, when it hit $1.64 billion. Net losses were $1.41 billion, compared with losses of $720 million the previous year.
For the first quarter of 2001 Amazon forecast sales of between $650m and $700, more than $100 million less than expected. For its full fiscal year it said sales would grow 20-30 per cent - to between $3.1bn and $3.6bn, and down from the company's original prediction of $4bn. ®