Amazon wraps controversial week ahead of ‘Melania’ premier, earnings

It was a turbulent week for Amazon.

From a bungled email prematurely announcing another massive round of layoffs to scrutiny around the company’s $75 million investment in a documentary about the first lady, Amazon heads into its quarterly earnings report next week surrounded by a deafening level of outside noise.

On Saturday, Amazon CEO Andy Jassy and a top entertainment exec from the company joined a group of CEOs, politicians and celebrities at the White House for a private screening of “Melania,” which was produced by Amazon MGM Studios and Melania Trump.

The event was roundly criticized for appearing tone deaf as it occurred mere hours after federal immigration agents shot and killed urgent care nurse Alex Pretti in Minneapolis, the second such deadly incident there in less than three weeks.

While most of the biggest names in tech stayed mum on the matter, many people in the industry expressed outrage over the incidents, and urged other members of the tech community to publicly denounce the killing of Pretti and the prior shooting of Renee Good, as well as President Donald Trump’s immigration policies.

Apple CEO Tim Cook, who attended the screening, subsequently issued a statement calling for a “deescalation” after the recent violence but without mentioning the two fatal shootings. Amazon hasn’t commented on the matter.

Amazon’s ties to the Melania film, which officially hit theatres on Friday, was awkward enough given the political tensions building in Minneapolis and elsewhere. The price tag has raised further questions about Amazon’s agenda and whether the company is trying to curry favor with the president.

“I’m not involved in that. That was done with my wife,” President Trump told reporters on Thursday at a premier for the movie in Washington, D.C.. “I think it’s a very important movie. I think it’s really going to be very important. It shows life in the White House. It’s a big deal, actually.”

A spokesperson for Amazon MGM said in an email, “We licensed the film for one reason and one reason only — because we think customers are going to love it.”

Early ticket sales for the documentary have been weak, and the film is projected to bring in about $5 million during its opening weekend in the U.S. and Canada, Puck News reported, citing National Research Group forecasting data.

Making the timing even worse for Amazon, which has also agreed to stream a three-part docuseries through Prime Video, the company on Wednesday initiated another round of mass layoffs impacting about 16,000 corporate workers. The company let go of 14,000 employees last October.

The announcement was preempted a day early by an inadvertent email sent to cloud employees, which alluded to “organizational changes,” and a post from Amazon’s human resources boss Beth Galetti.

The layoffs are part of a broader effort by Jassy to cut costs and “remove bureaucracy” at the company, while it pushes to invest heavily in artificial intelligence. Some employees previously told CNBC that the cost cuts and rolling layoffs have damaged morale.

In a Reddit forum for Amazon employees, some users questioned the rationale of the company’s money-saving efforts alongside its investment in “Melania.”

“With $75 million we could have given each laid off employee about $4,500,” wrote one user. “But instead we spent it on the ridiculous Melania movie. Ashamed to work at Amazon.”

Analysts at Citizens said this week that they expect Amazon’s 30,000 job cuts to generate up to $8 billion of cost savings in 2026.

In a segment for “The Daily Show” that aired Thursday, host Desi Lydic called it a “cash grab,” and criticized Jeff Bezos, Amazon’s founder and former CEO.

“Why would Jeff Bezos, a billionaire who has tons of business with the government, run by a famously corrupt president known for loving bribes, overpay for a Melania documentary?,” Lydic said. “Hmm, let me think.”

And filmmaker Julie Cohen, who previously worked with Amazon on documentaries, told The New York Times that the Melania price tag was abnormal and suggests the company “is buying something else for their money.”

After he was repeatedly attacked by Trump in his first term, Bezos has cozied up to the president this time around. He’s dined with Trump at his Mar-a-Lago residence, and he attended the inauguration a year ago. Amazon, meanwhile, donated $1 million to Trump’s inauguration fund and helped pay for Trump’s $300 million ballroom renovation.

There was even more drama in the broader Bezos universe this week after multiple outlets reported that the Washington Post, which Bezos has owned since 2013, is preparing broad layoffs across the newsroom, with the sports, local and international sections expected to be impacted.

The newspaper’s White House team wrote a letter to Bezos, describing the importance of the work of those teams and telling their boss that they need “collaboration with all corners of the newsroom.”

By the middle of next week, the attention on Amazon will be coming from a more familiar place: Wall Street.

On Thursday, the company is scheduled to report fourth-quarter results, wrapping up earnings season for the tech giants (though Nvidia reports later in the month).

Amazon is expected to report revenue growth of about 13% to $211.3 billion, according to analysts surveyed by LSEG. The expansion is being driven by Amazon Web Services and digital advertising, which are both projected to show growth of around 22%, based on data from FactSet.

Analysts at KeyBanc Capital Markets upped their price target on the stock this week and kept their buy recommendation, in part due to an acceleration at AWS, boosted by a recent deal with OpenAI. Amazon is now in talks to invest up to $50 billion in OpenAI, CNBC confirmed this week.

As Amazon races to keep pace with rivals in AI, the company is boosting spending on data centers. In the earnings report, capital expenditures are likely to show an increase of 24% from a year earlier to almost $34.5 billion, according to LSEG.

The KeyBanc analysts said that while those rising costs will weigh on profitability, “we believe Amazon will continue looking across the organization for further efficiencies to minimize the potential margin impact.”

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