Scale has proved crucial to Amazon’s success, allowing the technology titan to compete aggressively on price and to grow sales rapidly. But the heft of its operations comes with a weighty cost base, one that sits far less easily when sales are at risk of a rapid slowdown as recession looms in some of its largest markets.
Amazon, widely seen as a bellwether for the health of the American economy, has braced investors for a potential total wipeout of profits in its fourth quarter. Guidance of between zero and $4 billion in operating income, compared with $3.5 billion for the same period last year, was worse than analysts had anticipated.
The shares have fallen by just over $68, or 40 per cent, since the
