Amazon has reported a significant loss in the first three months of 2022, and the announcement has sent the stock plunging. The giant tech company said that it had a net loss of $3.8 billion in the quarter that ended on March 31.
This is a sharp decrease in income from the same period last year in 2021, when Amazon made an $8.1 billion profit. The big decline in revenue also puts the overall earnings at a mark far off from the $4.4 billion profit that analysts had forecast.
Amazon has pointed to the investment in electric car maker Rivian Automotive as the cause of the loss. Amazon said it lost $7.6 billion from this investment. Amazon led a $700 million investment into Rivian in 2019, and since then, has seen its stock plummet more than 75 percent.
The Amazon loss came one day after Ford, which was another early investor in Rivian, took a $5.4 billion pre-tax charge related to the investment in Rivian. This resulted in Ford reporting a $3.1 billion net loss for the first quarter.
After announcements of revenue losses, Amazon shares sank about 10 percent in after-hours trading.
Amazon CEO Andy Jassy said in a statement that the Covid pandemic and the Russian war in Ukraine have brought unusual growth and challenges.
In an earnings call, Amazon’s chief financial officer Brian Olsavsky blamed higher inflation, fuel prices, and labor constraints for an additional $2 billion in cost compared to the year prior.
The earnings hit for the company comes as it continues to grapple with pressure from warehouse employees over major issues such as pay and working conditions.
Only a few weeks ago, workers at a Staten Island, New York, warehouse voted to form the first-ever US labor union within Amazon ever. Amazon has filed an appeal and called for a do-over in the vote. When the union was formed, leaders of the union said that when Jeff Bezos was going to space, they were organizing a union.