Twitter Owes Amazon At Least $70 Million

Twitter has been late in paying Amazon Web Services for cloud services to power the app. In return, this has prompted Amazon to threaten to withhold payments for advertising on the Twitter app. The Information reported this last Friday. Twitter is also late in paying AWS for cloud services it has not even used and that amounts to about $70 million.

This news complicates Twitter owner Elon Musk’s quest to cut expenses to make up for the fact that the app’s advertising revenues have declined since he took over the company last fall.

Years before Musk acquired Twitter, a contractual commitment was made to AWS for cloud services. The contract was to remain in effect regardless of whether or not the company used those services. To-date, Twitter has barely used any of the services covered by that commitment. Nonetheless, AWS will not renegotiate the contract. The report also indicates that Twitter has been unable to renegotiate with GoogleGOOG
for an even bigger contract.

Andy Jassy, CEO of Amazon, is closing eight Amazon Go Convenience Stores. That leaves 23 remaining Go locations in the U.S. This adds more specificity to a recent announcement that some GO stores would be closed. Four of the eight are in San Francisco, two in New York, and two in Seattle. The two in Seattle had been temporarily closed and now will remain permanently shuttered. The company still plans to expand its grocery business, just through other formats. Andy Jassy has said that “the company will expand fresh grocery once the company finds an “equation with differentiation and economic value that we like.”

Amazon is also pausing work on its HQ2 office in Northern Virginia. The company is still studying its real estate needs.

The first phase of HQ2 is set to open in June, 2023. It has a capacity of 14,000 employees. Amazon said it has more than 8,000 employees assigned to the site. Plans for the second, and larger, phase of construction were initially focused on later this year. Now, The Informer quotes John Schoettler, vice president of world-wide real estate, saying: “the company has decided to push the groundbreaking out a bit”. He did not give a date when construction would start.

Meanwhile, Amazon will move into two new office towers in Belleville, Washington by the end of this year. It was also indicated that Jassy has set May 1 for the majority of corporate employees to return to the office at least three days per week.

POSTSCRIPT: It is obvious that Andy Jassy is determined to implement a successful growth plan for Amazon. And, that plan includes making an effort to get people to work in the offices again. It is time for companies like Amazon to put COVID-19 in the rear-view mirror. Jassy is doing everything to create a profitable company. I think he will succeed.