Amazon doubled its profit during a pandemic
July 30, 2020
Amazon CEO Jeff Bezos warned investors earlier this year that they might want to take a seat and prepare for a possible loss in Q2, as the company planned to spend $4 billion — all of its expected Q2 operating profit — on COVID 19-related expenses. Amazon projected a potential loss of $1.5 billion this quarter. But with the end of Q2 now behind us, Amazon shared its quarterly results, and they’re quite the opposite of gloomy.
Despite the pandemic, Amazon doubled its net profit year over year to $5.2 billion, compared to $2.6 billion at this time in 2019. This impressive figure comes after the company spent over $4 billion on what Bezos describes as “incremental COVID-19 related costs in the quarter to help keep employees safe and deliver products to customers,” suggesting profit could have more than doubled if not for those expenses.
Amazon touted that, since March, it created 175,000 new jobs, of which it is currently converting 125,000 into regular, full-time employees. The company said that it committed $27 million toward Black Lives Matter donations, though $8.5 million in donations comes from employees. It also distributed a one-time $500 million bonus among its frontline workers and partners, though Amazon didn’t share exactly how many employees received a bonus. Some of the $4 billion in COVID expenses was used to pay higher wages for people working hourly.
It’s rare to see a company doing well during a pandemic that has left millions of people unemployed, though the tech industry has been doing remarkably well. It’s particularly shocking that Amazon ballooned its quarterly profit twofold compared to this time last year. It didn’t lose its footing during a time of economic turmoil — it grew. Bezos says he expects the company to spend at least another $2 billion worth of operating income on COVID-related expenses in Q3.