Amazon Loses All Pandemic Gains After Dropping 50% in 2022 as Tech Stocks Plunge
Per CNBC
Amazon rose to new heights amid the pandemic as buyers had no options but to purchase goods online. With recovery from the pandemic as physical stores are opening up and the added pressure of raising interest rates, the company lost the last of its pandemic-fueled gains.
On December 19, $AMZN dropped to $84.92, its lowest price since March 16, 2020, before the first Stay at Home Order was issued on March 19, per Time and Date. On May 12, 2021, an article by the NYT shared how Amazon increased profit by 220% as more people started to buy online, with its stock price closing at $157.60 when the article was released.
Amazon is not the only tech company that fell sharply amid the broad tech sell-offs. However, its 49% drop this year can be compared to the dot-com crash of 2000 when the company's stock fell in value by 80%.
Other tech stocks that drastically fell in value include Tesla, down by 57%, and Meta, down by 66% this year, as Amazon ranks third among the other big tech companies.
Although the company was able to capitalize on the pandemic lockdowns pushing eCommerce growth, things are different in 2022 when there are simultaneous limiting factors including supply chain constraints, inflation causing high prices, and the war on Ukraine further generating pressure for all tech companies.
To deal with the situation, the company decided to lay off thousands of employees, freeze hiring and shut down various programs to lower expenses. The company also lowered its expectations by expecting sales between $140 billion and $148 billion instead of the initial $155.15 average analysts' forecasts.
Amazon CEO Andy Jassy says that the layoffs are expected to continue into 2023 as the company plans to let go of 10,000 staff, per Fortune. The CEO's statement also highlighted that they would offer a voluntary reduction offer for certain employees in the People, Â Experience, Technology (PXT) organization.
Jassy: "Amazon has weathered uncertainty and difficult economies in the past, and we will continue to do so."
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