Interestingly, some Amazon financial numbers are better than ever. For example, Amazon’s quarterly revenues rose from $110.812 billion on 30 September 2021 to $127.101 billion on 30 September 2022.

Some people are wondering if Amazon (AMZN) is in decline because the Everything Story is laying off employees.

Amazon Inc. (NASDAQ: AMZN) could cut 10,000 jobs, or around 3%, of its workforce, The Washington Post speculates. Ironically, Layoff announcements began on 15 November 2022, just before the holiday shopping frenzy.

However, it appears The Post’s reporters based the layoff speculation on “hearsay from people familiar with the matter who spoke on the condition of anonymity to describe sensitive matters.” That’s journalists’ doublespeak for unverified rumor. Notably, Amazon founder Jeff Bezos owns The Washington Post.

Is Amazon Laying People Off?

Conversely, some Amazon employees reported layoffs on social media. The Post claims the actual layoffs began on 16 November 2022. They concentrated lay offs among tech staff in Seattle, Vancouver, and the San Francisco Bay Area. Reputed layoffs include of Amazon’s Alexa team.

Notably, media reported no job cuts at Amazon fulfillment centers or in the delivery business. Instead, I think Amazon is cutting a few excess jobs in a few development facilities.

Moreover, the job cuts are tiny. Macrotrends estimates Amazon (AMZN) employed 1.608 million people worldwide in 2022. Additionally, Amazon employed 1.1 million people in the United States in February 2022, GeekWire estimates. Hence, I calculate what The Washington Post calls “mass layoffs” affect less than 1% of Amazon’s US workforce.

Is Amazon really Laying People Off?

Notably, a 16 November Google search found over 100 Amazon job openings, including Fulfillment Center Warehouse Associate, Amazon Locker+ Customer Service Associate, Amazon DSP – Delivery Driver, and Amazon Delivery Station Warehouse Associate. Amazon was also seeking season warehouse workers.

I think the US is entering a strange new economic phase. There seem to be plenty of jobs for laborers and the working class while companies lay off software engineers. That’s a reversal of the economic trends of the last three decades that favored tech bros over working Joes. An economy where Joe Sixpack has plenty of work while companies lay off latte-sippers society could upset American politics and society.

However, Amazon (AMZN) bulls will say the company is eliminating high-paying positions that add little to the bottom line while hiring more of the people who do the work that make the money. Hence, job cuts could make Amazon a better investment?

Is Amazon (AMZN) a better investment?

Interestingly, some Amazon financial numbers are better than ever. For example, Amazon’s quarterly revenues rose from $110.812 billion on 30 September 2021 to $127.101 billion on 30 September 2022.

Stockrow estimates Amazon’s quarterly revenues grew by 14.7% in the quarter ending on 30 September 2022. Amazon’s quarterly revenue growth grew from 7.21% in the quarter ending on 30 June 2022 and fell from 15.26% in the quarter ending on 30 September 2021.

Consequently, Amazon’s quarterly gross profit grew from $47.882 billion on 30 September 2021 to $56.833 billion on 30 September 2022. However, Amazon’s quarterly operating income fell from $4.852 billion on 30 September 2021 to $2.525 billion on 30 September 2022.

Hence, Amazon is generating more revenue but making less money. Yet Amazon is still making enormous amounts of money.

How Much Cash is Amazon (AMZN) generating?

Amazon (AMZN) is generating less cash. For example, Amazon’s cash and short-term investments fell from $79.224 billion on 30 September 2021 to $58.893 billion on 30 September 2022. The cash and short-term investments hit $96.309 billion on 31 December 2021.

Amazon reported a quarterly operating cash flow of $11.404 billion on 30 September 2022. The quarterly operating cash flow rose from $7.313 billion on 30 September 2021. Amazon’s quarterly operating cash flow rose to $22.086 billion on 31 December 2021.

However, Amazon reported a quarterly ending cash flow of -$2.533 billion on 30 September 2022. That was better than -$10.49 billion on 30 September 2021. Amazon reported a quarterly ending cash flow of $36.599 billion on 31 December 2021.

Amazon has Less Cash and More Debt

Amazon (NASDAQ: AMZN) can generate enormous amounts of cash. Yet Amazon is borrowing heavily.

For example, Amazon reported a quarterly financing cash flow of $4.626 billion on 30 June 2022 that fell to $3.016 billion on 30 September 2022. Amazon borrowed in each quarter of 2022, there was a $1.99 billion quarterly financing cash flow in the quarter on 31 March 2022.

Consequently, Amazon’s total debt rose from $129.538 billion on 30 September 2021 to $144.58 billion on 30 September 2022. Amazon finished the last four quarters with less cash and more debt.

What Value Does Amazon Offer?

I still think Amazon (AMZN) offers enormous value because it had $428.362 billion in total assets on 30 September 2022. The total assets grew from $382.406 billion on 30 September 2021.

Impressively, the number of U.S. Amazon Prime users grew from 99.7 million in 2017 to 159.8 million in 2021, Statista estimates. Statista forecasts the number of American Amazon Prime users will grow to 163.5 million in 2022, 167.2 million in 2023, 171.8 million in 2024, and 176.2 million in 2025.

I think the source of Amazon’s value is its incredible supply chain. For example, Amazon had 1,137 distribution centers in the United States in January 2022, Tinuiti estimates. Plus, Amazon had plans for 331 new distribution centers in the United States.

Amazon’s Incredible Logistics Network

Amazon (AMZN) operates 2,297 logistics facilities worldwide, MWPVL estimates. There are 1,245 logistics Amazon logistics facilities in the USA and 1,043 in other countries, MWPL estimates. Plus Amazon has plans for 75 future logistics facilities in the United States and 346 future logistics facilities in other countries.

 

In detail, MWPL estimates Amazon operates 98 small sortable fulfillment centers, 108 Large NonSortable Fulfillment Centers (FCs), 12 3PL NonSortable FCs, 53 Specialty Fulfillment Centers, 40 Sub-Same-Day Fulfillment Centers, and 17 Supplemental centers in the USA.

 

Furthermore, Amazon operates 46 fulfillment centers in the United Kingdom, 12 fulfillment centers in Brazil, nine fulfillment centers in Mexico, 18 fulfillment centers in Canada, 30 fulfillment centers in Germany, 11 fulfillment centers in France, 10 fulfillment centers in Italy, 16 fulfillment centers in Spain, 50 fulfillment centers in Japan, 72 fulfillment centers in India, and nine fulfillment centers in Australia.

 

Amazon employs 400,000 drivers worldwide, CNBC estimates. Amazon’s delivery fleet comprises 40,000 semi-trucks, 30,000 vans, and over 70 planes in September 2021, CNBC estimates. Thus, Amazon operates one of the world’s most impressive logistics networks.

 

Thus, Amazon offers enormous value for the $91.71 Mr. Market paid for it on 21 November 2022. I think that value will grow, making Amazon a value investment. The only attraction Amazon lacks is a dividend. However, I think events will force Amazon’s management to offer a dividend soon. If you want a growing cash-rich value investment, Amazon is worth examining.

 

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Amazon (AMZN) is generating less cash. For example, Amazon’s cash and short-term investments fell from $79.224 billion on 30 September 2021 to $58.893 billion on 30 September 2022. The cash and short-term investments hit $96.309 billion on 31 December 2021.
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