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Concerns over Amazon and Apple’s upcoming profitability have increased as the digital titans have warned that the worsening global economy is hurting their sales.
After the US stock market closed, Amazon shares fell more than 15% after the company lowered its holiday season sales projections.
After a warning about waning demand for games and advertising, Apple shares also fell.
Both mentioned how declining consumer purchasing power results from growing living expenses.
Brian Olsavsky, the chief financial officer of Amazon, invited analysts to a conference call to discuss the results. He acknowledged the current state of the economy while being upbeat about the holiday.
The company’s founder, Jeff Bezos, recently advised investors to “batten down the hatches” in light of recent economic warning signs.
Even Apple, one of the most reliable tech behemoths, was not immune.
Winter of Unhappiness
Apple said in its update on Thursday that sales increased by 8% to $90.1 billion in the three months ending in September compared to last year.
That was a record-breaking quarter, even as iPhone sales fell short of expectations and China’s economy grew slowly.
However, Apple executives warned investors, stating that they detected instability in online gaming and digital advertising and anticipated a steep decline in Mac computer sales. In addition, a strong dollar would hurt business, they continued.
During the epidemic, as more activity went online, Apple and Amazon experienced a surge in business.
Although consumers are again doing more of their shopping in person and changing their purchasing patterns in reaction to increased prices, sales have drastically slowed over the past year.
Although Amazon’s overseas business declined, its overall revenues increased 15% year over year to $127.1 billion in the three months to September. Additionally, the profitable cloud services division’s growth stagnated.
While Amazon sales were strong in July, they declined in August and September, particularly in Europe, according to Mr. Olsavsky, who attributed the decline to a harsher economic climate.
He also mentioned how rising fuel prices would probably hurt profits.
Recent financial updates have also been the subject of executive discussions at several big internet companies, including Microsoft, ,and, Facebook..
Amazon employees in the UK fall short of the strike vote
The first-ever poll for strikes at a UK Amazon warehouse location fell short of the required signatures.
Despite 99% of participants supporting the action, it was missed by three votes, according to the union GMB.
According to UK legislation, a majority of members who are eligible to vote must cast a ballot for it to be legal.
Amazon claimed to have raised wages and provided Coventry employees with a “full benefits package.”
After receiving an “insulting” wage offer earlier this year, some workers at the city’s Lyon’s Park location took part in unofficial demonstrations.
To help the corporation improve its track record on health and safety issues, the union claimed it has long fought for official registration at the massive online retailer. On Thursday, Labour leader Sir Keir Starmer supported this effort.
The online shop should have a “unionized workforce,” he argued while addressing delegates at the TUC Congress in Brighton.
According to Amazon, its pay offer, with a minimum wage of between £10.50 and £11.45 per hour. “Employees are also offered comprehensive benefits worth thousands more, including private medical insurance, life assurance,” says the statement. “The minimum hourly wage paid to Amazon associates has increased by 29% since 2018.
Additionally, all full-time, part-time, and seasonal frontline employees will soon receive an additional one-time payment of up to £500.