Amazon has secured an $8 billion loan in anticipation of a headwind.
The loan – which will mature in 364 days (January 3, 2024), with an option to extend for another 364 days – will be used for “general corporate purposes,” Amazon said in a filing with the US Securities and Exchange Commission. In a statement, an Amazon spokesperson told TechCrunch that the loan adds to the range of financing options the company has tapped in recent months to protect against the “uncertain macroeconomic environment.”
“Like all companies we regularly evaluate our operating plan and make financing decisions – such as entering into term loan agreements or issuing bonds – accordingly,” the spokesperson said by email. “Given the uncertain macroeconomic environment, over the past few months we have used different financing options to support capital expenditures, debt repayments, acquisitions and working capital needs.”
Amazon’s revenue fell by the end of 2022 as the economy took its toll. The tech giant spent billions to double the size of its fulfillment network during the pandemic, a play that served it well at first but proved to be short-sighted.
Amazon has been forced to close or delay plans for more than a dozen facilities as e-commerce sales last year grew more slowly than expected. Another headwind – rising energy prices – has affected Amazon’s business in a significant way, with the company’s transportation costs rising 10% to 19.9 billion dollars in Q3 2022.
To cut costs, Amazon plans to reduce its workforce in early 2023, reportedly by more than 10,000 employees. The layoffs, which would be the largest in the company’s history, are said to be focused on Amazon’s human resources, Alexa and retail divisions.
In other cost-saving measures, Amazon froze hiring for corporate roles in its retail business, shuttered its Amazon Care telehealth service, closed all but one of its call centers in the United States, and scaled back Amazon Scout, the robot project His delivery lasted a long time. . These moves are not enough to prevent the company’s market cap from falling below $1 trillion for the first time since April 2020.