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Amazon says the coronavirus pandemic saved it $1 billion in travel expenses

CNBC logo CNBC 10/29/2020 Annie Palmer
  • Amazon has saved nearly $1 billion in travel expenses this year because of the coronavirus pandemic, CFO Brian Olsavsky said on the company's third-quarter earnings call.
  • While Amazon has seen a drop off in business travel expenses, the company said coronavirus-related costs continue to rise.
Nikol Szymul staffs a reception desk at Amazon offices discretely tucked into a building called Fiona in downtown Seattle, Washington on May 11, 2017. © Provided by CNBC Nikol Szymul staffs a reception desk at Amazon offices discretely tucked into a building called Fiona in downtown Seattle, Washington on May 11, 2017.

Amazon has saved nearly $1 billion in employee travel expenses this year, as the coronavirus pandemic kept employees from hopping on airplanes.

"There's some benefits going on right now," Amazon CFO Brian Olsavsky said on the company's third-quarter earnings on Thursday. "Travel ground to a halt."

Internal travel expenses will likely resume "at a later date," but they may not rise to the same level that they reached in the past, Olsavksky added. He also said the company saved some money from reduced marketing costs.

Early on in the pandemic, Amazon told its more than 1 million employees to avoid all non-essential travel in the U.S. and abroad out of concern for their health and safety. Additionally, many countries have prohibited or restricted U.S. citizens from entering, as U.S. coronavirus cases continue to rise.

Despite the cost savings from travel and marketing, Amazon says expenses are increasing in the current quarter. Coronavirus-related costs are expected to rise to $4 billion in the period, up from $2.5 billion last quarter.

The company said fourth-quarter operating income will range from $1 billion to $4.5 billion, with about $4 billion of costs tied to Covid-19, up from $2.5 billion last quarter. The bulk of those costs are related to "productivity headwinds" from increased social distancing, along with testing employees for the coronavirus and acquiring protective supplies.

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