E-commerce giant Amazon has reported a surge in sales during the Wuhan coronavirus pandemic, but increased costs due to the pandemic will cost the company at least $4 billion in the second quarter, according to CEO Jeff Bezos.
CNET reports that e-commerce giant Amazon has come under fire during the Wuhan coronavirus pandemic for its ability to deliver goods to its customers and the treatment of its warehouse workers. The firm addresses both of these issues during its first-quarter results meeting.
CEO and founder Jeff Bezos stated that he plans to spend billions of dollars in the coming quarter as parts of its response to the Wuhan coronavirus.
“If you’re a shareowner in Amazon, you may want to take a seat, because we’re not thinking small,” Bezos wrote Thursday. “Under normal circumstances, in this coming Q2, we’d expect to make some $4 billion or more in operating profit. 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 reportedly plans to spend more to increase wages for workers and purchase safety gear such as face masks. The firm is also working on the internal development of its coronavirus testing capabilities which will cost $300 million in the second quarter and could cost $1 billion for 2020. Amazon already spent $600 million in the first quarter on coronavirus-related costs.
Amazon stock hit an all-time high this month but shares dropped by 4 percent in aftermarket trading following Bezos’ warning despite having a better-than-predicted increase in revenue.
Amazon purchased 1,500 cameras from Zhejiang Dahua Technology Co Ltd. this month in a deal that is valued at close to $10 million. At least 500 systems from the Chinese company are reportedly for use in the United States. The company has been blacklisted by the U.S. government for palying a part in China’s human rights violations against its Muslim minorities.
The procurement is reportedly legal as rules restricting U.S. government contract awards and exports to blacklisted firms do not apply to the private sector. However, the United States “considers that transactions of any nature with listed entities carry a ‘red flag’ and recommends that U.S. companies proceed with caution,” according to the Bureau of Industry and Security’s website.
Amazon stated that it was implementing thermal imagers from “multiple” manufacturers which it declined to name. These vendors allegedly include Infrared Cameras Inc. which was previously reported by Reuters, and FLIR, according to employees at the Amazon-owned Whole Foods.
The Trump Administration added Zhejiang Dahua Technology and seven other tech firms to a blacklist last year for acting against U.S. foreign policy interests, accusing them of being “implicated” in “China’s campaign of repression, mass arbitrary detention, and high-technology surveillance against Uighurs, Kazakhs, and other members of Muslim minority groups.”
Lucas Nolan is a reporter for Breitbart News covering issues of free speech and online censorship. Follow him on Twitter @LucasNolan or contact via secure email at the address lucasnolan@protonmail.com
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