Amazon to prevent Christmas shortages, might pay billions

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Shopping giant Amazon said it will quite a lot of billion dollars to manage labour shortages and supply chain problems up till Christmas.

The company stated that it was doing “whatever it takes to minimise the impact” on customers and sellers.

In the meantime, Apple went through a shortage of semiconductor chips that cost it $6bn (£4.35bn) in lost sales.

Apple’s CEO Tim Cook admitted its issues would continue over the festive period. Its fourth-quarter sales rose 29% to $83.4bn, they fell short of expectations and profit rose to $20.5bn from $12.6bn.

Amazon on the other hand said it would have to spend a momentous amount of money to manage its own scarcities.

Andy Jassy – chief executive of Amazon said they expected to “incur several billion dollars of additional costs” as it managed its way through “labour supply shortages, increased wage costs, global supply chain issues, and increased freight and shipping costs”.

 He further added: “It’ll be expensive for us in the short term, but it’s the right prioritisation for our customers and partners.

Amazon’s profits fell abruptly to $3.2bn from $6.3bn in the third quarter to 30 September, on sales 15% higher at $110.8bn.

Staffing shortages

The firm has been facing troubles related to staffing, causing the retailer to offer one-off payments of up to £3,000 in a bid to entice staff in UK counties where labour demand is high. 

Amazon is hiring for 20,000 positions across its UK network during the festive season amongst uncertainties over worker shortages. 

It also started offering a £1,000 signing-on bonus to recruit permanent staff in some regions in August. Pay for temporary roles starts at a minimum of £10 per hour, rising to £11.10 in some parts of the UK.

Previously, Amazon has faced allegations of poor working conditions both in the UK and the US, where it is the country’s second-largest employer.

Reuters reported Amazon Chief Financial Officer Brian Olsavsky had said worker shortages caused erratic staffing levels at the company. He said staff became its key capacity constraint in the third quarter, which he added was having an influence on other areas of the business.

 

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