Is Jeff Bezos Running for Office? The Un-Businessman CEO
Talk about corporate populism! Where most CEOs these days concern themselves with the grim job of improving, if ever-so-slightly, on the year-ago quarter's EPS figure, and maybe on talking the company’s stock up a bit, Amazon’s (AMZN) Jeff Bezos at times seems utterly disconnected from those concerns.
As the online retailer announced a $274 million third-quarter loss, and sales growth below Wall Street expectations, Bezos was talking over the heads of investors to – well, who knows who he’s talking to?
“Our approach is to work hard to charge less,” Bezos said in the third-quarter earnings release. “Sell devices near breakeven and you can pack a lot of sophisticated hardware into a very low price point.” He then went on to discuss how cool the Kindle’s various models are, albeit profit is not a feature of the device.
Ticking off its recent achievements, Amazon’s press release went on to brag: “Amazon announced it is hiring for more than 50,000 seasonal positions at its fulfillment centers across the U.S. this holiday season. Amazon employs more than 20,000 people across its 40 U.S. fulfillment centers and pays its full-time, permanent employees 30% more than what traditional retail store employees earn.”
Barack Obama and Mitt Romney should be doing so much to ease the jobless rate. If every American CEO started hiring like Jeff Bezos, and paid workers more than the competition, well this damned recession would be over tomorrow. Corporate profits? Well, that’s another matter.
As YCharts has reported, despite the incredibly efficient service we Amazon customers experience, productivity of late at the company has taken a dive, as worker headcount rises faster than sales.
Amazon’s fans, the fans of the stock, that is, seem to think there is some magic milestone at which -- $100 billion in sales? The demise of Best Buy (BBY) and Barnes & Noble (BKS)? Apple (AAPL) deciding to voluntarily leave the gadget business? – the profits will start to pour in, making the company as profitable as it is popular with consumers. But really, even if rival retailers go kaput, do you really think new ones won’t pop up in their place? And having gained its customers by discounting and offering free shipping, does it seem plausible that Amazon would all of a sudden jack up prices and not suffer a huge loss in sales?
Bezos, jumping up and down and waving the pom poms over Kindle and more new warehouses and all the nice young people he’s putting to work, doesn’t address these concerns. And to date, with a blip here and there, investors seem to be buying it.
Maybe the guy ought to run for president.
Jeff Bailey is the editor of YCharts, which includes the just-released YCharts Pro Platinum for professional investors.