Amazon profits top $10B in HQ lottery year
Coming off a year in which it worked to lay a foundation in both “brick and mortar” retailing and the corporate corridors of the East Coast, Amazon continued its steady growth with a 31 percent increase in revenue 2018 from the year before to $232 billion.
Amazon profits topped $10 billion last year, including $3 billion in the fourth quarter that was up by more than half from the year before. Amazon reported $72.4 billion in fourth-quarter revenue that included the 2018 holiday season, up 21 percent.
In mid-November, Amazon revealed its choices of Long Island City, N.Y., and Arlington, Va., as its choices for a secondary East Coast headquarters after a nationwide site search, with the two locations to employ 50,000 people between them.
On a Thursday conference call, Amazon’s chief financial officer Brian Olsavsky offered no details on the development of those new office centers. At present, the company currently lists close to 800 open jobs in the New York City area and about 300 near Arlington, compared to more than 9,500 at its historic headquarters operation in Seattle.
For rank-and-file workers at its distribution warehouses and other jobs, Amazon instituted a $15 minimum hourly wage starting in November for all employees including some 200,000 hired for this past holiday season. About 850,000 people applied in October for jobs with Amazon after it announced the pay hike, more than double the number of any preceding month.
“There was a lot of pre-hiring in 2017 that we digested in 2018 in some areas, especially in things like our core retail business and also (administrative) functions,” said Brian Olsavsky, chief financial officer of Amazon, on a Thursday afternoon conference call. “In a lot of ways, 2018 was about banking the efficiencies of investments in people, warehouses (and) infrastructure, that we had put in place in 2016 and 2017.”
Last year, Amazon expanded its Prime membership club to include discounts at Whole Foods Market, which it acquired in 2017. At the same time, the company experimented with an experimental convenience store format that eliminates checkout stations with sensors that charge customers for items as they leave the premises.
On the home front, Amazon stated it has improved by 20 percent the ability of its Alexa voice-control system to recognize commands, which now total more than 80,000 and with Alexa able to control some 28,000 devices for the home.
And the company made another major foray onto the small screen with the creation of IMDb Freedive on its Internet Move Database website, with movies and TV shows available on an ad-supported channel rather than the subscription model of its Amazon Prime streaming service.
“Streaming video and music … builds stronger Prime connectivity with our Prime members — at least, higher membership renewal rates and higher overall engagement,” Olsavsky said. “We continue to see that engagement growing.”
Alex.Soule@scni.com; 203-842-2545; @casoulman