AMZN Stock: This Means Trouble For Amazon.com, Inc.

amazon stockHoliday Bumps For Amazon Stock

Amazon.com, Inc. (NASDAQ:AMZN) is readying itself for the holiday season, but a recent string of bad news may spell trouble for the online retailer. Amazon stock has been making a gradual recovery after being hit by the Donald Trump wave.

News has come in that workers at German warehouses of Amazon.com, Inc. were called out on strike by labor union Verdi on Wednesday as part of a long-running dispute over pay and conditions. Verdi said that it was calling workers at three of the nine Amazon warehouses in Germany to join the strike, which will run until December 24. Workers at Amazon’s warehouse in Koblenz already launched a strike on Monday. (Source: “Union calls new strikes at Amazon’s German warehouses,” Reuters, December 21, 2016.)  

Verdi leader Stefanie Nutzenberger said the strike would cause disruption and higher costs at Amazon. She stated that constant checks and heavy workloads were leading to an extreme strain on the workforce. If many workers join the strike, it is likely to impact the sales at the retail giant, which could push AMZN stock down.  

But, according to the report, an Amazon spokesperson said that the company did not expect many workers to take part. “There is no impact on our delivery promise: Christmas presents will arrive in time,” he said.  

Such strikes are not new in Germany, where Amazon.com, Inc. and the union Verdi have locked horns over the workers’ compensation before. Verdi wants Amazon staff to be part of the retail industry’s collective bargain structure, whereas Amazon has rejected these demands, saying they should be treated as logistics workers. In earlier strikes, Amazon had made use of other depots across Europe to meet its delivery schedules.

In another piece of news, Amazon has sold out of its “Echo” speakers ahead of the holiday shopping period. The voice-activated speakers are out of stock, and this may lead to higher sales for the “Google Home” speaker. The Echo device may still be available at other retailers, as well as Amazon bookstores in San Diego, Portland, and Seattle, said Amazon spokesperson Kinley Pearsall. (Source: “Amazon Sells Out of Echo Speakers in Midst of Holiday Rush,” Bloomberg, December 20, 2016).

There is no doubt that Amazon Echo speakers are a hit, but being out of stock at this time of year is not good news for the company, nor for Amazon stock.