| 29 May 2024, Wednesday |

Amazon to pay billions to prevent Christmas shortages

Amazon revealed that it will spend several billion dollars to address labor shortages and supply chain issues in the run-up to Christmas.

The online retail giant said it was doing “whatever it takes to minimize the impact” on customers and sellers.

Meanwhile, Apple said a shortage of semiconductor chips had cost it $6bn in lost sales.

The tech giant’s boss, Tim Cook, admitted its problems would persist over the festive period.

While the technology giant said fourth-quarter sales rose 29% to $83.4bn, they fell short of expectations. Profit rose to $20.5bn from $12.6bn.

Cook said it had experienced “larger-than-expected supply constraints” in the three months to 25 September and the chip shortage was now affecting “most of our products”.

Amazon said it would have to spend a significant amount of money to manage its own shortages.

Chief executive Andy Jassy said Amazon projected to “incur several billion dollars of additional costs” as it managed its way through “labor supply shortages, increased wage costs, global supply chain issues, and increased freight and shipping costs”.

“It’ll be expensive for us in the short term, but it’s the right prioritization for our customers and partners,” he added.

Amazon’s profits fell sharply to $3.2bn from $6.3bn in the third quarter to 30 September, on sales 15% higher at $110.8bn.