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Class Traitor?

The Register, a snarky British tech site, reports that Amazon to blow this quarter’s profits and more on coronavirus costs:

“Providing for customers and protecting employees as this crisis continues for more months is going to take skill, humility, invention, and money,” said CEO Jeff Bezos in a statement [PDF] accompanying the web giant’s latest financial figures.

“If you’re a shareowner in Amazon, you may want to take a seat, because we’re not thinking small.”

Bezos said the US mega-corp expects to spend all of its anticipated $4bn Q2 operating profit and then some on COVID-19-related expenses. This includes not only the usual operational outlay to get products to customers, but also to protect the health of employees, something that’s been an issue among Amazon workers.

Amazon, according to Bezos, will be spending its cash on protective gear, facility scrubbing, business process changes to allow for greater social distancing, higher wages for hourly workers, and internally developed COVID-19 testing capabilities for employees.

Amazon’s stock retreated about five per cent in after-hours trading as investors showed their lack of enthusiasm for the company’s plan to try to keep its workers alive. ®

Unlike the shareholders who are only concerned with immediate returns, Bezos wants the company to survive the COVID-19 pandemic. Given that no one in government with the ability to distribute tests is interested or capable of providing them at the level required to keep distribution systems going, Amazon is going to do it itself. When you actually found and build a business, rather that just buy stock or inherit it, you want it to succeed.

The ‘analists” of the Wall Street casino are only interested in cutting costs and maximizing profits for the next quarter, not the overall health of a business.

May 3, 2020   No Comments