Amazon confidently returns to the right track after two years of struggling

CEO Andy Jassy outlined Amazon’s balance sheet management strategy at the company’s annual shareholder meeting. Here, he acknowledges the need to return the company to a “healthy profit margin, after sales.” retail The slowdown and rising costs have eaten into their most recent quarterly earnings, and highlighted the importance of adjusting Amazon’s “cost structure.”

“We’ve effectively reduced our cost structure before, and I’m highly confident that we’ll get back on track as we work through these two incredibly unusual years,” Jassy said. know at Amazon’s annual shareholder meeting, first attending when he took the helm from founder Jeff Bezos last July.

Jassy took over during a tumultuous time at the Amazon, initially because of Covid-19, and then inflation, rates rose and the war in Ukraine began to take its toll on the economy. Amazon has paid billions of dollars in pandemic-related costs, as it ramps up testing and cleaning and other safety measures for frontline workers. The company also doubled its physical footprint and ramped up hiring to manage the spike in online orders.

As 2021 ends, Amazon faces higher costs due to supply chain and labor shortages, along with inflationary pressures. Then, in February, Russia invaded Ukraine, which pushed up gas prices and sent the cost of all goods across the globe skyrocketing.

Last month, Jassy said in an interview with CNBC that the costs of inflation, the Covid-19 pandemic and the war in Ukraine have become too high for the company to absorb.

“We’ve had some unusual things happen over the last few years, some of which are more in our control than others,” Jassy said. “External factors that may be a bit less of our control are actually related to inflation, where the cost of trucking, trucking, sea and air, and fuel all fall. “We’re working hard to reduce those costs wherever we can.”

In April, Amazon also imposed a 5% fee on US third-party sellers who use its shipping and storage services in an effort to offset some of those costs.

The company has also struggled to make use of all the warehouse capacity it has added during the pandemic. And after months of understaffing, it now has overcapacity in its responsive network, as many of those employees have recently ceased to be needed due to cooling e-commerce sales. .

In his first-quarter results, Amazon CFO Brian Olsavsky said overstaffing led to “lower productivity,” adding about $2 billion in costs over last year.

Jassy confirmed a report from Bloomberg that Amazon plans to cut some warehouse space to address the problem of excess capacity.

“We have some steps that we’re taking right now,” Jassy said. “We’re trying to delay construction on properties that we don’t have capacity for yet and we’ll also let some leases expire. But I’m also pretty confident that we do. will leave a certain mark in this comeback.”

Amazon CEO vows to improve workplace injury rates

In his first letter to Amazon shareholders, CEO Andy Jassy defended the salary and benefits the company offers to warehouse workers and pledged to improve internal injury rates. bases.

Jassy, ​​who took over as CEO of Amazon, Jeff Bezos, last July, wrote that the company had researched and created a list of 100 “pain points employees go through” and is looking for how to solve them.

“We’re also passionate about further improving safety in our performance network, with a focus on reducing strains, sprains, falls and repetitive strain injuries,” he wrote.

“Our injury rates are sometimes misunderstood.” In the letter, Jassy said Amazon actually divides its workforce into two categories when it compares itself to industry leaders: warehouse workers and courier services.

Amazon’s injury rate is higher than its warehouse peers – 6.4 vs 5.5 – but lower than courier companies 7.6 vs 9.1. According to Jassy, ​​if you think about it that way, Amazon is just average.