Amazon.com, the world’s largest and best-known etailer, is to slash its workforce by fifteen per cent, 1300 jobs, as it struggles toward its elusive goal of emergence from the red.
In a statement yesterday, Amazon warned that sales for the year ahead will be at least ten per cent lower than budgeted. Despite the ill tidings, chief executive Jeff Bezos assured worried investors that the group will not exhaust its cash reserves.
He asserted that Amazon had $1.1 billion in cash at the end of 2000 and will still have reserves of around $900 million by the year end. Chief financial officer Warren Jenson slicked the troubled waters with a further barrel of oil: “Unless the company chooses to raise cash to further strengthen its balance sheet or for strategic flexibility it has no reason to do so."
Fourth quarter losses soared from $323m to $545m – or 96 cents per share to $1.53. But analysts were less fazed by this than the plunge in forecast sales for 2001. According to Jenson, anticipated income for the year ahead has been revised downward from $4bn to between $3.4b-$3.5bn. He attributed this to the general slowdown in US consumer confidence.
Amazon's shares closed at $17.94 on Instinet but fell a further $1 in after hours trading
News source: Financial Times