Amazon secured $8 billion in loans in anticipation of market headwinds.
The loan, offered by DBS Bank, Mizuho Bank and others, has a maturity of 364 days (January 3, 2024), with an option to extend for an additional 364 days, and will be used by Amazon for “general corporate purposes.” said. Filed with the U.S. Securities and Exchange Commission. In a statement, an Amazon spokesperson told TechCrunch the financing adds to the various financing options the company has utilized in recent months to hedge against an “uncertain macroeconomic environment.” said.
“Like all companies, we regularly evaluate our business plans and make funding decisions accordingly, such as entering into term loan agreements or issuing bonds,” a spokesperson said electronically. said in an email. “Given the uncertain macroeconomic environment, we have used various financing options over the past few months to support our capital expenditures, debt service, acquisitions and working capital needs.”
Amazon’s revenue declined towards the end of 2022 as the economy took a hit. The tech giant spent billions of dollars to double the size of its fulfillment network during the pandemic.
Amazon was forced to close or postpone plans for more than a dozen facilities after its e-commerce sales last year were weaker than expected. Another headwind, soaring energy prices, has hit Amazon’s business hard, with shipping spending rising 10% to $19.9 billion in the third quarter of 2022.
To cut costs, Amazon plans to cut 10,000 employees in early 2023. The biggest layoffs in the company’s history are said to be concentrated in Amazon’s human resources, Alexa and retail divisions.
Among other savings, Amazon has frozen corporate hiring in its retail operations, closed its Amazon Care telemedicine service, closed all but one of its U.S. call centers, and launched its long-running delivery robot project, Amazon Scout. scaled down. These moves weren’t enough to prevent the company’s market cap from falling below his $1 trillion mark for the first time since April 2020.
