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By Glenn Chapman

Online retail colossus Amazon on Thursday reported profit of $9.9 billion in the recently ended quarter on growing sales and more efficient deliveries. online news

Sales reached $143.1 billion in the recently ended quarter, up 13 percent from the same period last year, according to Amazon.

“We had a strong third quarter as our cost to serve and speed of delivery in our Stores business took another step forward,” said Amazon chief executive Andy Jassy, adding its ad business grew “robustly” and AWS cloud computing business “continued to stabilize.”

Amazon earnings “soared past expectations” in the quarter, according to Insider Intelligence analyst Zak Stambor.

“The retail giant’s slowdown last year appears to be in the rearview mirror as it has embarked on significant cost-cutting throughout this year and sharpened its focus on key growth areas, such as its high-margin online marketplace and advertising,” Stambor said.

A top US antitrust regulator sued Amazon in September, accusing the online retail behemoth of running an illegal monopoly by strong-arming sellers and stifling potential rivals.

“Our complaint lays out how Amazon has used a set of punitive and coercive tactics to unlawfully maintain its monopolies,” said Federal Trade Commission Chair Lina Khan.

Robots and drones

Amazon said Thursday it will hire 250,000 full-time, part-time and seasonal employees in the United States to handle shopping demand in the months ahead.

Amazon union organizers in headlines & news online — Amazon workers and supporters march during a rally in Castleton-On-Hudson, about 15 miles south of Albany, N.Y., Monday, Oct. 10, 2022. The startup union that clinched a historic labor victory at Amazon earlier this year is slated to face the company yet again, aiming to rack up more wins that could force the reluctant retail behemoth to the negotiating table. (Rachel Phua via AP)

The e-commerce star added that it will invest $1.3 billion to bump up the average hourly wage for delivery and fulfillment jobs to more than $20.50.

Amazon said last week that it will expand drone delivery of certain purchases to a third US state as well as to Britain and Italy by the end of 2024.

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Amazon delivery drones are already at work in California and Texas, and a new model will be able to operate in more extreme weather conditions than those currently in use, Amazon Prime Air vice president David Carbon said during a marketing event.

Amazon has also installed a new robotics system in one of its Texas logistics centers, featuring technology like automated vehicles, mechanical arms and computer vision technology.

Amazon already uses 750,000 robots in its warehouses to speed up deliveries.

“The better they get at delivery, the more it continues to grow the e-commerce market overall and Amazon’s place within that market,” said Insider Intelligence analyst Andrew Lipsman.

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But increased productivity via robots won’t fix underlying Amazon worker issues, critics say.

“It’s not going to change their logic. And their logic is ‘Use these workers up and throw them away’,” said Sheheryar Kaoosji, executive director of the Warehouse Worker Resource Center, a nonprofit dedicated to improving warehouse industry conditions in southern California.

Amazon early this year eliminated some 27,000 jobs in a move it said at the time was necessary, after years of sustained hiring.

Ads shine

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Advertising continues to be “a major bright spot” for Amazon and it has started using generative artificial intelligence to help sellers create “eye-catching” ads in its online marketplace, analyst Stambor said.

Insider Intelligence expects Amazon US advertising business to bring in nearly $34 billion this year in a major leap from before the Covid-19 pandemic.

But while Amazon Web Services (AWS) profit was up in the quarter compared to the same period a year earlier, the unit’s growth lagged that reported for the quarter by rival cloud businesses operated by Microsoft and Google.

Amazon just weeks ago said it would invest up to $4 billion in AI firm Anthropic, as it steps into an AI race dominated by Microsoft, Google and OpenAI.

The success of OpenAI’s ChatGPT, a chatbot released last year that is able to generate poems, essays and other works with just a short prompt, has led to billions being invested in the field.

Anthropic agreed to use Amazon’s chips to develop its next models and to use AWS for “mission critical workloads.”

Amazon has already announced it aimed to soup up its Alexa voice assistant with generative AI, which the firm said would allow users to have smoother conversations.

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