“In the fourth quarter, we expect to incur several billion dollars of additional costs in our Consumer business as we manage through labor supply shortages, increased wage costs, global supply chain issues, and increased freight and shipping costs—all while doing whatever it takes to minimize the impact on customers and selling partners this holiday season,” CEO Andy Jassy said in a statement. “It’ll be expensive for us in the short term, but it’s the right prioritization for our customers and partners.” Analysts were expecting earnings of $8.92 on revenue of $111.6 billion. Breaking down revenue by segment, AWS brought in $16.11 billion in net sales in Q3. Its 39% growth rate is better than Q2’s 37% growth rate and above the 29% growth rate posted in Q3 2020. “It has led to wage increases and sign-on incentives as companies compete for workers as well as inconsistent staffing levels in our operations,” he said. “In addition, disruption to the global supply chains and inflation in the cost of materials such as steel and services such as trucking have also raised our cost of operations. We estimate the cost of labor, labor-related productivity losses and cost inflation to have added approximately $2 billion in operating costs in Q3, particularly in August and September.”
