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Technology Stocks : Amazon.com, Inc. (AMZN) -- Ignore unavailable to you. Want to Upgrade?

To: HG who wrote (92472)	1/28/2000 2:03:00 PM
From: puborectalis	Read Replies (1) \| Respond to of 164684

NEWS review: Amazon.com Fires 150 Employees, 2% of Online Retailer's Staff; Shares Drop By Heather Landy Amazon.com Fires 150 Workers, Mostly in Seattle (Update2) (Adds comments from analyst in fourth paragraph and investor in sixth paragraph.) Seattle, Jan. 28 (Bloomberg) -- Amazon.com Inc., the fast- growing Internet retailer that's racked up losses totaling more than $550 million, said it fired about 150 employees, or 2 percent of its workforce. The retailer wouldn't say why it's cutting jobs. The firings are spread across divisions and are mainly in Seattle, where Amazon.com is based. The stock fell 6 3/8, or 9.5 percent, to 60 9/16 in early afternoon trading. The shares have fallen by almost half from a high of 113 in December -- erasing about $17 billion in value -- on concern that Chief Executive Jeff Bezos' plans to spend more on advertising and new products would exacerbate losses. The job cuts raise concern about how much the company is spending. ``A lot of the Internet skeptics are saying this means Amazon.com isn't going to make it,' said analyst Thomas Wyman at J.P. Morgan, who rates the shares ``buy.' ``I think that's the wrong interpretation.' The cuts may indicate that new Chief Financial Officer Warren Jenson, who came from Delta Air Lines Inc. in September, is making Amazon.com more disciplined in spending, according to Wyman and the retailer's biggest outside investor. ``They're showing a commitment to profitability, and they probably saw that last quarter their costs were up,' said analyst Ron Sachs at Janus Capital Corp., which was Amazon.com's largest investor after Bezos as of September. Losses The biggest online retailer has been quickly adding staff with its expansion. It had 7,500 workers before the cuts. That compares with 2,100 as of Dec. 31, 1998, and 614 the year before that, according to regulatory filings. The company hasn't said whether it will take a charge for the move, said spokesman Bill Curry. Amazon.com, which began selling books in 1995, has yet to make money and is expected to report a loss in the fourth quarter. Bezos has said he doesn't expect Amazon.com to soon turn a profit. The retailer is expected to have a loss of 48 cents a share for the quarter, before acquisition-related costs such as goodwill, according to analysts polled by First Call/Thomson Financial. Estimates range from a loss of 43 cents to 55 cents. Amazon.com spends heavily on promoting its site. Marketing and sales expenses were $233.2 million in the nine months ended Sept. 30, equal to almost 25 percent of total revenue. Those expenses include the costs of filling orders. `Not Holiday Workers' The job cuts aren't related to temporary workers hired for the holiday season, said spokesman Curry. ``I would almost classify it as growing pains for them,' said Peter Schwab, managing director at Ernst & Young. ``They probably just overhired in various places and now realize they don't need those people.' Amazon.com isn't the first Internet retailer to cut staff. Beyond.com Corp. said last week that it will cut 75 jobs, or 20 percent of its staff, as the online software seller shifts away from consumers to focus on business and government clients. Value America Inc., an online retailer of computers and office supplies, last month said it would fire 47 percent of its more than 600 workers, and pare product categories as sales missed forecasts. The company also said it would focus more on business and government sales. As Amazon.com grows, ``we're going to continue to always review the organization and make sure we have the skills in line with our mission,' Curry said.