Amazon’s core e-commerce company may be faltering but other profit-generating segments are performing admirably.
According to the corporation, online sales were flat in the first three months of the year compared to the same period in 2022.
However, this was offset by higher-than-expected sales in its cloud services and advertising segments.
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Profits increased as well, indicating that the company’s cost-cutting initiative is beginning to bear fruit.
Chief executive Andy Jassy said: “There’s a lot to like about how our teams are delivering for customers, particularly amidst an uncertain economy,”.
Amazon sales have been slow as consumers return to in-store buying following the pandemic and tighten their budgets in response to rising living costs.
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Concerns about the economy’s trajectory have also affected on its company, as companies become more hesitant about spending.
Mr. Jassy has been pressing the company to improve its performance since taking CEO last year, shutting down several programs, such as its Halo fitness division earlier this week, pausing real estate development ambitions, restructuring its delivery network in the United States, and announcing thousands of job losses.
The size of the firm’s workforce has shrunk by 10 percent since March last year – shedding more than 75,000 employees just since the end of last year.
Insider Intelligence principal analyst Andrew Lipsman said this may be starting to pay off.
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Mr. Lipsman said: “For the first time in several quarters, Amazon may finally have a bit of wind at its back,”
In Amazon’s advertising unit, revenue soared 23 percent compared with last year, while sales at Amazon Web Services – long the firm’s big profit driver – grew 16 percent
Overall sales were up 9 percent to $127.4bn in the January-March period – akin to growth at the end of last year – and a big comedown from the pandemic, when sales surged more than 40 percent in some quarters.
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Still, the firm’s performance was better than many analysts had expected and profits jumped to $3.2bn, compared with a $3.8bn loss in the quarter last year.
Shares in the company gained more than 7 percent in after-hours trade.
Mr. Lipsman said: “Amazon did what it needed to do in Q1 by reversing – or at least stalling – its most troublesome declining growth trends.
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