Amazon could spend $300M on developing COVID-19 testing this quarter
Amazon on Thursday disclosed that it expects to spend somewhere around $300 million this quarter developing its own COVID-19 testing system, in a move that could influence how other companies with large warehouse and factory operations try to resume business amid the pandemic.
All told, the $300 million investment is just a fraction of what the global pandemic will cost the e-commerce giant. With the release of its first quarter financial results on Thursday, Amazon said it expects just about all of its Q2 operating income -- approximately $4 billion -- to go toward costs related to COVID-19.
Amazon says it has assembled a team -- comprising professionals like research scientists, program managers, procurement specialists and software engineers — that's dedicated to building incremental testing capacity. The team is building its first lab and has begun a pilot to test front-line employees.
"We're not sure how far we will get in the relevant timeframe, but we think it's worth trying, and we stand ready to share anything we learn," the company said in a release.
"We've put some of our best people on it," CFO Brian Olsavsky said on a conference call Thursday. "I think everyone is trying to get testing. It's not readily available on the scale that we needed for -- to test our scale of employees."
Amazon has more than 175 fulfillment centers across the globe, including more than 110 facilities in the US.
Asked about whether this research could open up a new revenue stream for Amazon, Olsavsky said he wasn't sure. "Our main concern is getting testing in the hands of our employees," he said. "And then, potentially as we have excess capacity, perhaps we can help in other areas."
In the past two months, Amazon has taken a number of steps to address the COVID-19 health risks posed to its warehouse workers, such as implementing enhanced cleaning and social distancing measures, delivering personal protective gear like masks to employees and implementing temperature checks across its operations.
Some of these measures, however, were only implemented after workers at Amazon fulfillment centers began speaking out in protest over the company's lack of precautionary measures -- and after workers began getting sick.
Yet even as Amazon steps up its response, the pandemic continues to create turmoil for the business. In France, Amazon was forced to temporarily close its warehouses after a court said it had failed to protect its workers. In the US, warehouse workers continue to strike over safety issues. Some worker advocacy groups say more than 130 Amazon warehouse workers have had confimed COVID-19 cases, NPR reported.