NYPD union sues Amazon over pandemic losses

The pension fund for hundreds of New York Metropolis police detectives has sued Amazon in federal courtroom, claiming the e-retail big and its executives misled traders and hid losses spurred by the corporate’s “extreme” enlargement through the coronavirus pandemic.

• After Amazon lastly disclosed its “wrongful acts and omissions,” the worth of its inventory plummeted, “inflicting important losses and damages” to DEA and different traders, the swimsuit states.

The opposite facet: A spokesperson for Amazon stated in an e-mail to Axios on Monday the corporate wasn’t commenting on the lawsuit.

Driving the information: The DEA’s 26-page criticism — filed July 8 in Seattle, the place Amazon is headquartered — names CEO Andy Jassy, CFO Brian Olsavsky and head of investor relations David Fildes as defendants.

• The police pension fund filed the swimsuit as a category motion on behalf of all “individuals and entities that acquired Amazon frequent inventory between July 30, 2021 and April 28, 2022.”

What it says: The DEA’s swimsuit alleges that, amid the pandemic lockdowns that drove customers to buy on-line, Amazon invested $6 billion in increasing its warehouse distribution and information middle house.

• The corporate greater than doubled capability to over 387.1 million sq. ft by the tip of 2021, based on the corporate’s public statements cited by the lawsuit.

Sure, however: Amazon’s pandemic “enlargement was extreme, not supported by precise demand, unsustainable, and had created a major financial burden and yoke round its neck, inflicting billions of {dollars} in losses,” the swimsuit claims.

• By July 2021, the swimsuit contends that Amazon knew it had over-expanded and was compelled to make huge cutbacks.
• Firm officers “hid these important cutbacks from the general public whereas on the identical time assuring traders that the enlargement plan remained on observe and crucial,” the swimsuit claims.
• The $3.8 billion in losses disclosed months later have been Amazon’s first quarterly losses since 2015, the swimsuit says.

Flashback: The swimsuit additionally notes that simply six weeks after disclosing its first quarter losses, Amazon introduced the departure of Dave Clark, the CEO of its worldwide shopper division who “spearheaded the Firm’s huge enlargement.”

In the meantime, a coalition of labor unions additionally filed a criticism with the U.S. Securities Alternate Fee final week, contending Amazon misled traders by publicly sharing “cherry-picked and outdated information” about its warehouse damage charges final spring, per Geekwire.

Of be aware: The swimsuit was filed a couple of days earlier than Amazon Prime Day — the annual sale occasion unique to Prime members, and one in every of Amazon’s most vital gross sales intervals — which kicks off Tuesday.