Amazon loses $2.7 billion in 2022, reports first ‘unprofitable’ year since 2014 – Times of India

The Covid-19 outbreak acted as a huge impetus that expanded the scope of online shopping. During this period, Amazon kept growing as its profits doubled. However, the e-commerce giant couldn’t hire and build warehouses fast enough to meet the increasing demand in online shopping. Now, as the pandemic situation gradually ceases to exist, consumers have started returning to physical stores and have switched from cocooning to travel and outings. Moreover, with the rise in inflation, customers have also become more hesitant to spend.
As the pandemic-era shopping spree comes to an end Amazon’s run of surging profits is also going down. The company has now updated its blog post to announce its Q4 2022 results. As per the blog post, Amazon has reported its first unprofitable year since 2014. In 2022, the e-tailer lost $2.7 billion despite the holiday-season sales growing by 9%.
Why Amazon suffered a loss in 2022
The company explains that the biggest reason for its losses. Amazon claims that it was hit with losses over the year due to its massive investment in the electric automaker Rivian. The carmaker’s value went down in 2022 and also affected Amazon’s revenue.

Amazon has already started rolling out Rivian’s electric delivery vans and has a 20% stake in the carmaker’s company. Rivian once held one of the largest initial public offerings in US history and wanted to replicate Tesla‘s success. However, in 2022, the carmaker’s stock price dropped 82% as it made pricing mistakes and fell short of its growth targets.
How Amazon is planning to cope with the losses
The company has started reconsidering its warehouse expansion plans as several reports have tracked cancellations, closures and delays. Amazon CEO, Andy Jassy, appeared on a quarterly call with investors to state that his top priority was cutting costs in the company’s operations, reports NPR.
Jassy said: “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”. “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,” he added.
Last month, Amazon announced it expected to reduce about 5% of the company’s workforce (18,000 jobs). In a blog post, Jassy claimed that “the uncertain economy” and the company’s pandemic-era hiring spree are the reasons for such a decision.
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