The pandemic is prompting Amazon to spend $4 billion in expenses to protect workers from COVID-19 and to ensure deliveries arrive to customers.
The money will go toward buying personal protective equipment, paying for cleanings of company facilities, and raising wages for workers. Another $300 million will go toward funding an in-house COVID-19 testing process to screen employees for the virus.
Amazon revealed the spending plan on Thursday as company warehouse workers have been contracting the virus. The flood of online shopping during the pandemic is also creating supply shortages and forcing Amazon to delay deliveries, with orders often taking four days or longer to arrive at customer doorsteps.
“Under normal circumstances, in this coming Q2, we’d expect to make some $4 billion or more in operating profit,” Amazon CEO Jeff Bezos wrote in an earnings release. “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.”
The company has also created 175,000 new job openings to address the surge in demand. In an earnings call on Thursday, Amazon’s chief financial officer Brian Olsavsky said all 175,000 jobs have been filled. However, it remains unclear when the one- to two-day shipping times for Amazon Prime subscribers will return.
“Right now, things are still so up in the air, I can’t really project when that day will be,” Olsavsky said.
“The shipping is still pretty fast. It’s still coming quickly. It’s just that it’s taking longer to get things into our warehouses, and out of warehouses,” he added. “So that’s really the challenge right now is to speed that up. When we do that we’ll see a resumption of one-day service.”
Olsavsky also noted the company has increased its delivery capacity for groceries —a major product category in demand— by 60 percent.
Further Reading
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