American e-commerce company Amazon has secured a loan of $8 billion from DBS Bank, Mizuho Bank, and others. This loan which was secured in anticipation of market headwinds will mature on January 3, 2024 (a 364 days period) with the option to extend for another 364 days. In a filing with the US SEC, the company said the loan will be used for “general corporate purposes,” and according to a spokesperson, the loan is an addition to the various financing options that the company has embarked upon in recent months as plans to protect itself from the uncertain macroeconomic environment.
“Like all companies we regularly evaluate our operating plan and make financing decisions — like entering into term loan agreements or issuing bonds — accordingly. Given the uncertain macroeconomic environment, over the last few months we have used different financing options to support capital expenditures, debt repayments, acquisitions, and working capital needs,” the company’s spokesperson said.
Like many other companies around the world, 2022 was a tough year for Amazon as a result of inflation, macroeconomic challenges, and the fear that a recession may happen soon. The company also spent billions of dollars doubling its fulfillment network during the Covid pandemic which is now proving to be a decision that had no long-term consideration.
There are reports that Amazon plans to reduce its workforce in 2023 by up to 10,000 workers, which will become the biggest layoff in the company’s history. The company was also forced to shut down/delay plans for some facilities as a result of the slowdown in e-commerce sales.
The company has paused hiring for corporate roles and last year shut down its telehealth service. Its market capitalization also fell below the 1 trillion-dollar mark since April 2020, and as of the time of writing this draft, the company’s market cap was $875.51 billion.
Twitter and Tesla’s CEO also recently became the first person to lose $200 billion in human history.