Amazon.com Inc. is the world's first public company to lose a trillion dollars in market value as a combination of rising inflation, tightening monetary policies and disappointing earnings updates triggered a historic selloff in the stock this year.
Shares in the e-commerce and cloud company fell 4.3 per cent on Wednesday, pushing its market value to about $879 billion from a record close at $1.88 trillion on July 2021. Amazon and Microsoft Corp. were neck-and-neck in the race to breach the unwelcome milestone, with the Windows software maker close behind after having lost $889 billion from a November 2021 peak.
While technology and growth stocks have been punished throughout the year, fears of a recession have further dampened sentiment in the sector. The top five US technology companies by revenue have seen nearly $4 trillion in market value evaporate this year.
The world's largest online retailer has spent this year adjusting to a sharp slowdown in e-commerce growth as shoppers resumed pre-pandemic habits. Its shares have fallen almost 50 per cent amid slowing sales, soaring costs and a jump in interest rates. Since the start of the year, co-founder Jeff Bezos has seen his fortune dwindle by about $83 billion to $109 billion, according to data compiled by Bloomberg.
Last month, Amazon projected the slowest revenue growth for a holiday quarter in the company's history as shoppers reduce their spending in the face of economic uncertainty. That sent its market value below $1 trillion for the first time since the pandemic-fueled rally in tech stocks more than two years ago.
Hiring frozen
Amazon is pausing hiring for its corporate workforce, the latest move by the company to cut costs amid worries about the wider economic environment.
Company executives have decided to halt "new incremental hires'' for the entire corporate workforce and anticipate the pause to be in place for a few months, Beth Galetti, the senior vice president of people experience and technology, said in a memo posted on Amazon's website on Thursday.
The company "will continue to monitor what we're seeing in the economy and the business to adjust as we think makes sense,'' Galetti said. "We're facing an unusual macro-economic environment, and want to balance our hiring and investments with being thoughtful about this economy.''
Depending on the business, Galetti noted Amazon will hire backfills to replace employees who leave the company. In some areas, it will continue to hire people incrementally.
In the past few weeks, Amazon had paused hiring for the corporate side of its retail division and some of its other businesses. The company has also gotten rid of subsidiary fabric.om and shuttered its Amazon Care health service. Galetti said the Seattle-based retail and tech giant still intends to hire a 'meaningful number of people' next year.
