Amazon secured an $8 billion loan. The company has agreed with several lenders for an $8 billion loan to be prepared for the tough times ahead.
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DBS Bank, Mizuho Bank, and other companies have provided the loan. And it has been signed with the following conditions, "The term loan will mature in 364 days, with an option to extend for another 364 days, and the funds will be used for general corporate purposes."
"Like all companies, we regularly evaluate our business plan and make financing decisions accordingly, such as obtaining term loans or issuing bonds. Given the uncertain macroeconomic environment, in recent months, we have used different financing options to support capital expenditures, debt repayment, acquisitions, and working capital needs" Amazon said in an email, according to the tech news site Techcrunch.
Amazon had about $35 billion in cash and cash equivalents and long-term debt of about $59 billion at the end of the third quarter ended Sept. 30.
Amazon's revenue declined toward the end of 2022 as the economy took its toll. The company invested billions to double the size of its fulfillment network during the pandemic, a project that initially worked well.
Amazon had to halt and delay plans for more than a dozen facilities. This was because e-commerce sales rose more slowly than expected. On the other hand, rising energy prices affected the business in a major way, as shipping spending grew 10% to $19.9 billion in the third quarter of 2022.
Aiming to cut costs, the company plans to reduce its workforce in early 2023, reportedly by up to 10,000 employees. The largest layoffs in the company's history are said to be concentrated in Amazon's human resources, Alexa, and retail divisions.
Amazon announced that its massive planned layoffs will begin during the second week of January.
This first phase will cut 10.000 jobs - mainly in the U.S.A. - and it is expected to be followed by another phase with over 8.000 more layoffs all across the globe.
But Amazon is not the only tech company that has announced massive layoffs; Salesforce CEO Marc Benioff announced plans to cut 10% of its workforce “in the coming weeks” (estimated to affect roughly 7,900 of its 79,000 employees, according to the company) in an email to staff, saying the decision comes amid a “challenging” environment and as customers take a “more measured approach to their purchasing decisions.”
And in a letter to employees, Vimeo CEO Anjali Sud said the company is reducing its workforce by 11% (estimated to be just under 150 of its 1,400 employees, according to PitchBook) as it struggles with a “deterioration in economic conditions” including geopolitical conflict, rising interest rates, and the potential of a recession—it's the second round of layoffs in six months, after it cut 6% of its staff last year.
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