Amazon reduces losses but keeps an eye on the axe

NEWS Results met expectations, with net sales up 22 per cent to $700m, and net loss including charges down to $234m from $308m for the comparable period last year. While he welcomed the results, UK MD Steve Frazier warned that controlling expenditure and cost bases continued to be a major challenge for Amazon. He said future job cuts were not imminent, but could not be ruled out. "Going forward we'll have to continue to keep a close eye on costs. We can never say never about job cuts. We've worked hard to ensure we have the right cost base in place for what we forsee, but the right thing to do is to watch the numbers, if we have to adjust we will," he said. Amazon has already forecast restructuring charges of $50m for the second quarter. Job cuts in January cost the company $114m in charges this quarter. Amazon is still on track to achieve an operating profit by the end of the fourth quarter, Frazier said, but he warned that it would not be an easy run. "We aren't there yet. We have a lot of hard work in front of us. It remains a real challenge to prioritise and to stay focused on the things we need to do for next year," he said. While the UK and German sites are now beginning to experience growth, he said that the newer French and Japanese sites will continue to be an expensive burden this year as they find their feet in the market. Amazon's Jeff Bezos features in silicon.com's Agenda Setters 2001. To find out more, visit http://www.silicon.com/as2001