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It’s no secret the COVID-19 pandemic and other world events like the Russia-Ukraine war have shot ramifications throughout the global economy. But on Wednesday, Amazon Inc AMZN CEO Andy Jassy said that he believes the economic outlook to be more “uncertain” than previously thought at The New York Times’ DealBook event.
Jassy spoke about Amazon’s measures to cut costs, including laying off thousands of workers. Through this process, Jassy said he realized Amazon may need to do more than anticipated to match economic conditions.
It’s not what investors want to hear when one of the biggest companies in the world says that it will need to do more cost-cutting measures to survive a weakening macroeconomic environment.
One particular division of Amazon that will be hit hard with cost-cutting measures is its Alexa department. Amazon has spent billions of dollars on Alexa, according to CNBC, and yet customers typically only use the product for a few different functions.
It’s important to note that Jassy did not necessarily say that Amazon was bracing for a severe, 2008-like recession, but that the economy is more uncertain than he initially thought it to be.
Uncertainty also means the economy and stock market could outperform to the upside.
It appears that Wall Street did not love Jassy’s comments, as Amazon’s stock traded down more than a full percentage point Thursday, while other large-cap stocks like Apple Inc AAPL and Microsoft Inc MSFT were in the green.
Photo courtesy of Amazon.
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Image and article originally from www.benzinga.com. Read the original article here.