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Amazon Reports Slump in Profits Due to Labour, Supply Issues; Expects It to Continue Through Holiday Quarter

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By Reuters | Updated: 29 October 2021

Amazon on Thursday reported a slump in profit that it expects will continue through the holiday quarter, as higher pay to attract workers and other operational disruptions diminish the company’s windfall from online shopping.

Shares fell 4 percent in after-hours trade.

After a year of blockbuster results, the world’s largest online retailer is facing a tougher outlook. In a tight labor market, it has boosted average US warehouse pay to $18 (roughly Rs. 1,350) per hour and marketed ever bigger signing bonuses to attract blue-collar staff it needs to keep its high-turnover operation humming.

The company meanwhile is contending with global supply chain challenges. It has doubled its container processing ability, expanded its delivery partner program and has ramped up its warehouse investments – all at a noteworthy cost.

The company said it expects operating profit for the current quarter to be between $0 and $3.0 billion (roughly Rs. 22,440 crore), short of $6.9 billion (roughly Rs. 51,612 crore) Amazon posted the year prior. In the just-ended third quarter, net income fell by about 50 percent to $3.16 billion (roughly Rs. 23,637 crore), a first since the start of the coronavirus pandemic in the United States.

Andy Jassy, who became CEO in July, in a statement said Amazon was confronting higher shipping costs, increased wages and worker shortages. These labor challenges, plus lost productivity and cost inflation, added $2 billion (roughly Rs. 14,960 crore) to Amazon’s expenses in the quarter, an amount that’s expected to double in the holiday period.

Amazon is “doing whatever it takes to minimize the impact on customers and selling partners this holiday season,” he said. “It’ll be expensive for us in the short term, but it’s the right prioritization for our customers and partners.”

The retailer has strived to prevent a repeat of the 2013 season when delays left some without presents on Christmas Day.

Amazon’s struggle to staff its warehouses spells challenges for rivals this holiday season. Retailers already have faced difficulty stocking their shelves with popular toys, gadgets and sneakers.

Supply chain woes are also costing Apple — $6 billion (roughly Rs. 44,880 crore) in sales during the company’s fiscal fourth quarter according to results released on Thursday. Apple Chief Executive Tim Cook said that the impact will be even worse during the holiday sales quarter.

Michael Pachter, an analyst at Wedbush Securities, said Amazon’s supply chain challenge surprised him because he believed the company had plenty of products on its shelves to swap for those stuck on container ships.

“I thought they would be fine because of selection,” he said. “Apparently that’s not true.”

Labour Shortage

Some analysts like Nicholas Hyett of Hargreaves Lansdown gave Amazon a pass. They say the company’s track record of high spending to deliver for customers has paid off in the long run.

“Amazon has never been overly focused on the bottom line,” Hyett said.

Still, Amazon CFO Brian Olsavsky said on a call with analysts that some costs were here to say. While the price tag for steel needed for warehouse construction had gone up, and while the company would look to procure such items more cheaply in the future, he said Amazon’s base wage increases might be permanent.

He told reporters that Amazon had faced inconsistent staffing levels and that workers, not physical space, had become its primary capacity constraint in the third quarter. It wants to hire 150,000 more workers to meet U.S. seasonal demand this holiday.

This constraint has had a ripple effect.

“Inventory placement is frequently redirected to fulfillment centers that have labor to receive this product, which results in less optimal placement, which leads to longer and more expensive transportation routes,” he said.

Staff are pushing for more, too. Around 2,000 workers in New York City petitioned this week for a vote on whether to make their warehouse the company’s first unionized facility in the United States.

Olsavsky said Amazon had no announcement on whether to charge more for its loyalty club Prime subscriptions but added that the company always looks at that option.

To juice revenue, the company began encouraging customers to shop holiday deals as early as October 4 this year. Consumers have begun returning to pre-pandemic shopping levels, spending more on travel and services, Olsavsky said.

The company forecast fourth-quarter sales to be between $130 billion (roughly Rs. 9,72,414 crore) and $140 billion (roughly Rs. 10,47,216 crore). Analysts were expecting $142.05 billion (roughly Rs. 10,62,550 crore), according to IBES data from Refinitiv. It missed expectations for third-quarter sales as well, witnessing its slowest growth since the COVID-19 outbreak.

Amazon’s cloud computing division was a bright spot. Olsavsky said revenue growth re-accelerated for that business, and the company beat analysts’ expectations with net sales of $16.1 billion (roughly Rs. 1,20,416) in the quarter. Amazon Web Services has seen sales rise with demand for gaming and remote work during the pandemic.

Amazon’s total net sales rose to $110.8 billion (roughly Rs. 8,28,705 crore) in the third quarter; analysts had predicted $111.6 billion (roughly Rs. 8,34,688 crore).

© Thomson Reuters 2021

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Microsoft Office’s New UI Now Rolling Out for Everyone

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By ANI | Updated: 3 December 2021

American tech conglomerate Microsoft has started to roll out a new Office UI for its users this week. The visual update was originally announced earlier this year and went into testing over the summer.

Now it’s starting to roll out to all Office 365 and Office 2021 users, according to The Verge. This new Office UI is designed to match the visual changes in Windows 11, and it includes a more rounded look to the Office ribbon bar, with some subtle tweaks to the buttons throughout Word, Excel, PowerPoint, and Outlook.

It’s a relatively simple refresh, and Office will now match the dark or light theme that you set inside Windows. The new-look can be toggled on or off using the Coming Soon megaphone icon in the top right-hand corner of Word, Excel, PowerPoint, or OneNote.

It should be available for all Windows 11 users right now, and Microsoft says 50 percent of current channel subscribers will have the visual update enabled automatically.

Most of the design changes are subtle, but Microsoft has teased more dramatic changes to its Office UI, which included moving toward more of a command bar instead of the traditional ribbon interface.

As per The Verge, it’s still expected to see these changes appear in the Web and mobile versions of Office first, and Microsoft did say last year that its bigger Office UI changes could take a year or two to roll out.

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WhatsApp Said to Win Approval to Double Payments Offering to 40 Million Users in India

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By Reuters | Updated: 27 November 2021.

WhatsApp has won regulatory approval to double the number of users on its payments service in India to 40 million, a source with direct knowledge told Reuters on Friday. The company had requested that there should be no cap on users of its payment service in India.

Instead, the National Payments Corporation of India (NPCI) this week told the company it could double the user base to which it can offer its payment service – currently restricted to 20 million – the source said.

WhatsApp is owned by Facebook, which recently changed its name to Meta.

The source said the new cap would still hinder the company’s growth prospects given that WhatsApp’s messenger service has more than 500 million users in India, the company’s biggest market.

It was not clear when the new cap would come into effect.

WhatsApp did not immediately respond to a request for comment, while the NPCI declined to comment.

WhatsApp competes with Alphabet’s Google Pay, SoftBank- and Ant Group-backed Paytm, and Walmart’s PhonePe in India’s crowded digital market.

The NPCI gave WhatsApp approval to start its payments service last year after the company spent years trying to comply with Indian regulations, including data storage norms that require all payments-related data to be stored locally.

WhatsApp has almost reached its user base of 20 million for payment services, said the source, who declined to be identified as the details are private.

Online transactions, lending and e-wallet services have been growing rapidly in India, led by a government push to make the country’s cash-loving merchants and consumers adopt digital payments.

© Thomson Reuters 2021

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China Demands Tencent Submit New Apps, Updates to Inspection Before Being Uploaded: Report

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By Reuters | Updated: 25 November 2021

China has required Tencent Holdings submit any new apps or updates for inspections before they can be uploaded after a number of its apps were found to have committed violations, Chinese financial media outlet Yicai reported on Wednesday.

Yicai, citing unnamed sources, said the Chinese social media and gaming giant had been required to do so by China’s Ministry of Industry and Information Technology (MIIT) after some of its apps were found to have infringed users’ rights and interests.

It also said that MIIT had recently issued a notice to say that between November 24 to December 31, all mobile apps and their updates will need to undergo a roughly seven-day-long review before they can be uploaded to app stores.

Tencent said its apps remained functional and available for download in response to Yicai’s and other local media reports.

“We are continuously working to enhance user protection features within our apps, and also have regular cooperation with relevant government agencies to ensure regulatory compliance. Our apps remain functional and available for download,” the company said.

Chinese regulators have in over the past year mounted a wide-ranging crackdown on its tech giants, seeking to dismantle some of the industry’s long-held practices after accusing them of monopolistic behaviour and infringing user rights.

This has included a step up in checks on mobile apps by regulators. On November 3, MIIT ordered 38 apps from companies, including those of Tencent, to rectify the excessive collection of personal information.

© Thomson Reuters 2021

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Reddit to Shut Down TikTok-Like Dubsmash App, Integrate Video Tools With Platform

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By Reuters | Updated: 24 November 2021

Reddit is pulling the plug on its TikTok-like platform, Dubsmash, the social network said on Tuesday, just a year after buying it for an undisclosed sum to bolster its video creation tools.

The standalone Dubsmash app will not be available for download after February 22, Reddit said, as it rolled out new camera and editing features as part of its video tools.

TikTok’s massive success with short-form videos has driven other social networks to incorporate the format on their platforms, with Snap rolling out Spotlight; Facebook, now Meta Platforms, launching Instagram Reels; and Alphabet’s YouTube launching Shorts.

“The Dubsmash team has been accelerating Reddit’s video, so parts of Reddit will feel familiar to Dubsmashers,” the company said in a blog post.

Since Dubsmash’s acquisition, Reddit said it had seen 70 percent growth in overall hours watched, while the number of daily active video viewers rose by over a third.

Viewership for short videos, which the company defines as two seconds or less, has also risen by 50 percent quarter-over-quarter.

© Thomson Reuters 2021

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Spotify Launches ‘Netflix Hub’ on Its App to Lure Fans With Podcasts, Soundtracks From Popular Shows

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By Reuters | Updated: 24 November 2021

Music streaming platform Spotify Technology said on Tuesday it has introduced a new hub where fans can listen to all the official soundtracks, playlists and podcasts related to Netflix’s shows.

The Netflix Hub, as the companies are calling the new feature, will contain playlists from hit shows such as Money Heist and Bridgerton, as well as the official soundtrack from shows such as Squid Game. It can be accessed by both free and premium listeners.

The hub would also contain Netflix-tied podcasts including Okay, Netflix Is A Daily Joke, and The Crown: The Official Podcast, the Swedish company said in a blog post.

Spotify, which saw a rise in premium subscribers in the third quarter, has benefited from the pandemic as people turned to its music platform to stay entertained. But with growing competition from Apple Music and Amazon Music, Spotify is looking at introducing new features to attract more subscribers.

Earlier in 2019, it had also collaborated with Disney to create the Disney Hub.

Spotify said subscribers across the United States, Canada, Australia, New Zealand, the United Kingdom, Ireland, and India will have access to the hub.

© Thomson Reuters 2021

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DuckDuckGo Introduces App Tracking Protection to Stop Apps From Tracking Android Users

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By ANI | Updated: 22 November 2021

Privacy-focused browser maker DuckDuckGo’s new tool aims to prevent apps from tracking Android users.

According to The Verge, DuckDuckGo’s tool hasn’t been rolled out as part of an update to all Android phones, nor is it available as a separate download.

It’s built into DuckDuckGo”s privacy-focused browser app, but works across your device. In a post on its blog, the company said that the tool will block “trackers it identifies in other apps from third-party companies.”

Once App Tracking Protection is enabled, it will run in the background as you use your phone. The tool recognises when an app is about to send data to a third-party tracker, and will then prevent the app from taking your information.

DuckDuckGo said that it’s “continually working to identify and protect against new trackers,” which means that your data should be kept away from any new trackers that crop up.

From the DuckDuckGo app, you should also be able to see a real-time view of trackers that the tool has blocked, along with where your data would’ve been going.

The company says that although its App Tracking Protection tool isn’t a virtual private network (VPN), your device will behave as if it is one.

“This is because App Tracking Protection uses a local ”VPN connection” which means that it works its magic right on your smartphone. However, App Tracking Protection is different from VPNs because it never routes app data through an external server,” DuckDuckGo explained in its post.

While conducting its own test, DuckDuckGo found that more than 96 percent of some of the most popular free Android apps have third-party trackers that most users are unaware of.

As per The Verge, the company also discovered that 87 percent of these apps send user data to Google, while 68 per cent send data to Facebook.

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