Amazon Sees Costs Rise Amid Coronavirus Pandemic

Amazon Sees Costs Rise Amid Coronavirus Pandemic

e-commerce giant preps for the future

Amazon's shipping costs have increased by around 49% in Q1 due to the coronavirus pandemic when compared to Q1 2019, with the e-commerce giant expecting more outlays in Q2.

Amazon CEO Jeff Bezos said: "Under normal circumstances, in this coming Q2, we’d expect to make some US$4 billion or more in operating profit.

"But these aren’t normal circumstances. Instead, we expect to spend the entirety of that $4 billion, and perhaps a bit more, on COVID-related expenses getting products to customers and keeping employees safe."

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CFO Brian Olsavsky added: "It's taking longer to get things into our warehouse and out of our warehouse," with shipping speed on Prime items jumping from one to four days for essential items during the quarter ending March 31.

"As we add capacity, we're trying to resume more normal operations, as far as the shipping of non-essential items and the speeding up of one-day shipments," he said.

Amazon has already hired 85,000 new workers in Q1 after it had to suspend nonessential items coming into warehouses for over a week.

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