Amazon secured an $8 billion loan in anticipation of market headwinds.
Provided by DBS Bank, Mizuho Bank and others, 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 statement. filing with the United States 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 leveraged in recent months to hedge against “the uncertain macroeconomic environment.”
“Like all businesses, we regularly evaluate our operating plan and make funding decisions — like entering into term loan agreements or issuing bonds — accordingly,” the spokesperson said per E-mail. “Given the uncertain macroeconomic environment, over the past few months we have used various financing options to support capital expenditures, debt repayments, acquisitions and working capital needs.”
Amazon’s revenue plummeted towards the end of 2022 as the economy took its toll. The tech giant spent billions to double the size of its distribution network during the pandemic, a game that initially served it well but proved to be short-sighted.
Amazon was forced to close or delay plans for more than a dozen facilities as e-commerce sales last year grew slower than expected. Another headwind – soaring energy prices – had a major impact on Amazon’s business, as the company’s spending on shipping rose 10% to $19.9 billion. in the third quarter of 2022.
To reduce costs, Amazon plans to reduce its workforce in early 2023 by up to 10,000 employees. The layoffs, which would be the largest in the company’s history, would be concentrated in the human resources divisions of Amazon, Alexa and retail.
In other money-saving measures, Amazon froze hiring for corporate roles in its retail business, shuttered its Amazon Care telehealth service, shuttered all but one of its U.S. call centers and scaling back Amazon Scout, its longtime delivery robot project. . These measures were not enough to prevent the company’s market capitalization from falling below $1 trillion for the first time since April 2020.