Not long ago it was a pledge of billions for the climate crisis, now $4 billion for “safety”. Where are the audited accounts?
Above: Photo Collage / Lynxotic
Funny thing about promises made by politicians and owners of public companies. Although truth will eventually come out due to public access to accounting, these are often so far in the future that virtually anything can be promised today with no need for a specific plan or transparent numbers to back them up.
On May 3rd, in a dramatic “you may want to sit down” moment Jeff Bezos announced that the company he runs, and is the principal shareholder of, would take all of the $4 billion in expected 2nd quarter operating profit and “invest” it in “COVID-related” costs:
“Under normal circumstances, in this coming Q2, we’d expect to make some $4 billion or more in operating profit. But these aren’t normal circumstances. Instead, we expect to spend the entirety of that $4 billion, and perhaps a bit more, on COVID-related expenses getting products to customers and keeping employees safe.”
Now those who follow Amazon news might remember that in February the online retail giant’s owner pledged $10 billion as a “donation” toward battling climate change, under the moniker “Bezos Earth Fund”.
Even as these ego boosting promises are helping with the image of this company, often otherwise described as “the grim reaper” in the press for its murderous behavior toward any potential competition, a cursory look beneath the surface quickly yields another story. The announcement on Friday suspiciously coincided with fallout from a WSJ article alleging that false information was given in testimony relating to Amazon’s well known extreme competitive behavior against its own so-called marketplace sellers. On the same day as the “generous” promise came to light the WSJ published a follow up piece indicating that Bezos has been “asked” to testify before Congress and to clarify what appears to be an attempted cover-up of the well known practice.
A long history of incredibly consistent behavior points to something lurking beneath the headlines
While we are digging into the weeds here it’s important to note that both the promised, not yet existent, $4 billion and the “pledge” to set up the “Bezos Earth Fund” are not binding in any way, but simply vague promises. It will be months and likely years before any solid information could come out as to just what the various monies will be spent on, if at all.
For example, Amazon has made it well known that it intends to take its “Grim Reaper” show to the health care industry in an attempt to cause the same kind of carnage that it achieved in the book retail and publishing industries, not to mention Diapers and countless other product categories. Who’s to stop this push into a new area to conquer from being funded by this “generous promise” of $4 billion even while stating that all of Q2 profit will be used for “protecting employees as this crisis continues”. Who will prevent that from happening? Yes, you have it right, no one.
Meanwhile, even as these lovely pledges and promises get the digital ink equivalent of a small ocean, the usual slash, burn and pillage continues in plain sight. Many of those same digital outlets crowing about the generosity of the great emperor of Amazon’s promise, just had their business models turned to something more suited to a cremation urn than the daily news shelf. Amazon Affiliate payments to media outlets, a mainstay keeping many news organizations afloat (barely) were suddenly slashed up to 80% this week. So, in other words, a huge constituency that created the success of the giant firm is once again being rewarded by almost certain financial collapse. Big surprise.
There are two that “win”: one is Amazon, second a bribed customer and all others are lured into a death trap
This warrants a deeper look into the process and train of thought that can be deduced from the recent facts, actions and events. Amazon’s income has exploded since the coronavirus crisis began; hence the anticipated $4 billion operating profit projection.
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Warehouse workers ? A million allegedly working in almost sweatshop (or worse) conditions for slave wages. Do they benefit financially from this obscene windfall? Yes, they get, possibly, free masks. Perhaps a tiny pay raise for certain “teams”.
How about the marketplace sellers (you know the ones that Congress and the WSJ appear to believe have been systematically defrauded and cheated for decades) that generate nearly 60% of the gross income of the retail site? They will be rewarded with increased scrutiny, higher fees, higher costs and the usual brutal death camp treatment. Lower fees for the best among them? Never.
Ultimately, this charade is business as usual and par for the course from a company that did not get the nickname “Grim Reaper” for nothing. $14 billion for altruistic causes that represent selfless generosity towards others? That’s as likely as a Camel jumping through the eye of a needle.
full statement released by Amazon / Bezos:
From online shopping to AWS to Prime Video and Fire TV, the current crisis is demonstrating the adaptability and durability of Amazon’s business as never before, but it’s also the hardest time we’ve ever faced,” said Jeff Bezos, Amazon founder and CEO. “We are inspired by all the essential workers we see doing their jobs—nurses and doctors, grocery store cashiers, police officers, and our own extraordinary frontline employees. The service we provide has never been more critical, and the people doing the frontline work—our employees and all the contractors throughout our supply chain—are counting on us to keep them safe as they do that work. We’re not going to let them down. Providing for customers and protecting employees as this crisis continues for more months is going to take skill, humility, invention, and money.
If you’re a shareowner in Amazon, you may want to take a seat, because we’re not thinking small. Under normal circumstances, in this coming Q2, we’d expect to make some $4 billion or more in operating profit. But these aren’t normal circumstances. Instead, we expect to spend the entirety of that $4 billion, and perhaps a bit more, on COVID-related expenses getting products to customers and keeping employees safe.
This includes investments in personal protective equipment, enhanced cleaning of our facilities, less efficient process paths that better allow for effective social distancing, higher wages for hourly teams, and hundreds of millions to develop our own COVID-19 testing capabilities. There is a lot of uncertainty in the world right now, and the best investment we can make is in the safety and well-being of our hundreds of thousands of employees. I’m confident that our long-term oriented shareowners will understand and embrace our approach, and that in fact they would expect no less.
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