Lockdown Impact-Amazon to Hire Another 75,000 in the US Amid the Covid-19 Crisis

The coronavirus outbreak has taken its toll on the overall global economy, workers are reeling from the initial shock of the coronavirus recession, with a burst in job losses, which is being termed unprecedented. Lots of companies are forced to cut jobs or furlough their employees apart from wage reductions. But amid all the gloom, there are few segments and companies which have been on a hiring spree and in latest of them is Amazon, which recently announced to hire 75,000 more people in the United States in the coming months. The company earlier had offered 100,000 jobs in the United States and claimed to have filled all the positions. Those employees are working at sites to serve customers across the United States. All these recent vacancies are announced to cater to meet the increased demands for essentials and supporting their communities in the fight against unprecedented Covid-19 pandemic.

The company said that it would welcome people onboard on a temporary basis to fight the unseen enemy. However, the company has reportedly faced protests at its stores and warehouses for risking its people to the deadly virus.

Earlier in March 2020, other big retailers such as Walmart, CVS Health Corp and few others also planned to offer jobs in the United States in the near term. Walmart planned to hire 150,000 additional people, which employs around 1.5 million people in the United States; it also announced special cash bonuses for its hourly workers. The drugstore giant, CVS announced the hiring of 50,000 workers across its United States locations. The drug company announced cash bonuses to employees who are serving the company amid the outbreak.

Last month, in the United Kingdom, supermarkets such as Tesco, Asda, Aldi, and Lidl reportedly announced mass hiring to cater to the panic-buying by customers amid the coronavirus pandemic. However, to combat stockpiling and make sure everyone has access to the essential items, limits were also imposed on the essential items purchase.

The latest hiring could be attributed to managing the increase in demand for essential items and other household products. Many of the retail chains have shut their brick and mortar stores but continue to operate online.

The Covid-19 outbreak has claimed several lives across the globe. To contain the spread of the coronavirus pandemic, the governments across the world have been forced to impose lockdowns which has nearly halted all the economic activities. Small scale businesses have already cut jobs and the world is heading towards a major unemployment crisis. Hiring across the globe has come to a stand-still as the majority of the businesses across the world are trying to implement business continuity models and preserve cash in order to sustain themselves in the hour of global meltdown. The coronavirus pandemic has already inflicted the fear of deep global recession as being termed by the market experts.

However, the Retail sector, despite all the chaos has been hiring in many countries to cater to the increased demand for their products and services; and have become an important cog in the wheel to put up a fight against the novel coronavirus.

The retails players are operational online and have witnessed a significant increase in turnover worldwide. People amid lockdown are forced to stay indoors and are deeply reliant on these online retail providers for the essentials in order to survive for their existence. This has resulted in a sharp increase in the number of online orders for retailers across the globe and hence the requirements for supply chain management, packaging, distribution, and delivery staff has gone up significantly.

The impact of novel coronavirus is expected to stay on the global economy for an extended period now with an increasing number of infected people every day. Several businesses are expected to shut along with several jobs under risk even after they gather support in the form of stimulus packages from their respective governments.

Amazon’s Business performance for FY19

The company recorded a 20 per cent hike in Net sales from $232.9 billion in 2018 to $280.5 billion in the year ended 31^st December 2019. Upon excluding the unfavourable impact of $2.6 billion from year-over-year changes in foreign exchange rates throughout the year, the company saw a surge of 22 per cent in Net sales in 2019 in contrast to the previous year.

The company’s Net income increased from $10.1 billion, or $20.14 per diluted share in the fiscal year 2018 to $11.6 billion, or $23.01 per diluted share in the fiscal year 2019. Also, the company’s Operating income increased from $12.4 billion in the financial year 2018 to $14.5 billion in the financial year 2019.

The company’s prime membership continues to do well for the customers year after year. The company saw an increase in prime membership subscription by the consumers in the fourth quarter of 2019, and the company now has more than 150 million active Prime membership subscriptions across the world. The number of shipments (one-day and same-day delivery) within the United States for Prime customers have quadrupled in the fourth quarter of 2019. The company has significantly reduced its shipment delivery times. In addition, the consumers can now get grocery delivered for free in a two-hour window from Whole Foods Market and Amazon Fresh in more than 2,000 U.S. towns and cities. Also, Amazon Fresh services are a complimentary benefit for Prime members.

Amazon also announced Alexa integrations with the infotainment system for cars of automotive brands such as Fiat Chrysler Automobiles and Lamborghini. The new-age cars have a concept of connected cars which implies that most of the important controls can be done on a smartphone and Alexa would add another dimension to these connected features. In addition, Alexa would be integrated into new Amazon delivery vehicles. The company is continuously making improvements in Alexa to make it a smarter product and touch the lives of customers by introducing new features such as medication reminders.

(Source: Thomson Reuters, as on 14^th April 2020, after the market close)

AMZN shares on 14^th April 2020 last traded at USD 2,283.32, which was higher by 5.28 per cent from the previous day closing price level.

Amazon’s Guidance for Q1 FY20

In the first quarter of the fiscal year 2020, as of January 30, 2020, the company had expected the Net sales to increase in the range of 16 to 22 per cent and lie between $69 billion and $73 billion. This guidance includes a favourable impact from foreign exchange rates of approximately 5 basis points.

In addition, the company expected the Operating income to be in the range of $3 billion and $4.2 billion in the first quarter of the fiscal year 2020. Due to an increase in the estimated useful life of Amazon’s servers beginning in January 2020, the company has lowered the depreciation expense by $800 million in its Operating income guidance.

About Amazon Inc

Headquartered in Seattle, Amazon.com, Inc. (NASDAQ:AMZN) is one of the largest internet companies by revenue across the globe. Along with e-commerce, the company is into the business of artificial intelligence, digital streaming and cloud computing. The company has already made to the elite list of big tech companies such as Apple, Google and Microsoft. The company is driven by some basic principles such as customer obsession, continuous innovation, attaining operational excellence and valuing customer feedback. The company has pioneered best in class products and services such as 1-Click shopping, Kindle Direct Publishing, Alexa, Prime, Fire TV, and Amazon Echo.

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