Online retail giant Amazon has suffered its first quarterly loss since 2015 after reporting that it had lost $3.8 billion in the first quarter of 2022.

The quarterly loss was driven, in part, by a 3% fall in online sales and rising costs from “ongoing inflationary and supply chain pressures,” according to Amazon chief executive Andy Jassy.

Despite the net loss, Amazon’s overall sales rose to $116.4bn, 7% more year on year. However, it was sluggish compared to the first quarter of 2021, when sales increased 44%.

These were driven in part by growth in its cloud computing wing Amazon Web Services (AWS) and its advertising business. AWS’s revenues were 37% more than the same period last year, while advertising revenue grew 23%.

However, its international business saw sales shrink 6%. Inflation added an additional $2bn of costs for the quarter. Fuel prices have also made deliveries more expensive.

Amazon is also facing industrial action in the US, with workers unionising their first warehouse at the start of the month. Its reputation was further hit after six workers were killed after a tornado hit a warehouse.

As such, the company increased wages to attract more employees at a time when the US is also facing concerns about labour shortage.

In addition, the company was hit by its investment in electric car maker Rivian. Amazon invested took a 20% stake in the company 2019, but its earnings report showed that it took a $7.9bn loss on its investment. The car maker’s shares are now down by half compared to the start of the year.

Amazon added that it expects sales to grow as little as 3% in the coming months, far slower than what it experienced in previous quarters. Its operating income is predicted to range between a $1bn loss and a $3bn gain.

The news sent Amazon shares down 10% in after-hours trading.

“Today, as we’re no longer chasing physical or staffing capacity, our teams are squarely focused on improving productivity and cost efficiencies throughout our fulfilment network,” Jassey said in a statement.

“We see encouraging progress on a number of customer experience dimensions, including delivery speed performance as we’re now approaching levels not seen since the months immediately preceding the pandemic in early 2020.”

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The news comes hot on the heels of the recent announcement by Netflix that it suffered its first loss of subscribers in a decade. After adding more than a million viewers in the subsequent quarter, Netflix’s customer base shrank by 200,000 in the first quarter of this year.

This resulted in a major drop in the company’s share prices, layoffs and plans to crack down to password sharing and introduce adverts to the platform.

Digital platforms have enjoyed bumper growth over the pandemic, as housebound people turned to the internet for shopping and entertainment.

It wasn’t long ago that Amazon experienced its first-ever $100-billion quarter when it made $125.6 billion in the final three months of 2020.

However, since then, the cost-of-living crisis, driven by rising food and fuel prices, has seen consumers cut back in certain areas.

Furthermore, supply chain issues caused by lockdowns, especially in China, and disruptions from the war in Ukraine, have put pressure on many companies.

Amazon increased the price for its Amazon Prime service in the US at the start of this month, from $12.99 to $14.99. Prices for UK subscribers currently remain the same.

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