Amazon reports $3.2 billion in profit despite multiple rounds of layoffs

 

Amazon reported a strong profit of $3.2 billion for Q1 2021, which exceeded analysts' estimates and marked a significant turnaround from a loss of $3.8 billion in the same period last year. This comes as the e-commerce giant has implemented cost-cutting measures, including two rounds of layoffs and canceling product lines and physical store expansions. Despite lingering recession fears, key areas of Amazon's business have continued to grow, with revenue increasing by 9% compared to the prior year. The company is also optimistic about its second-quarter net sales, which it expects to grow between 5% and 10% from the same period in 2020.

The positive results indicate that Amazon's cost-cutting measures are having a positive impact on the company's business prospects, according to Jesse Cohen, a senior analyst at Investing.com. Amazon Web Services (AWS), which has long been a profit engine for the company, also experienced double-digit percentage growth during the quarter. AWS segment sales rose by 16% from the previous year to $21.4 billion, despite a slowdown in the previous quarter due to uncertainty about the economy's health.

CEO Andy Jassy said in a statement that while AWS has had to navigate companies spending more cautiously in the current macro environment, the company continues to prioritize building long-term customer relationships. Amazon's positive results and strong guidance for Q2 revenue suggest that the company may be starting to come out of the woods, Cohen added.