Amazon.com Inc. (NASDAQ: AMZN) started as an online bookstore in 1995. The largest company in the book retail business then was Barnes & Noble Inc. (NYSE: BKS). Over the intervening years, as Amazon has expanded almost endlessly into other e-commerce businesses, Barnes & Noble has collapsed under the weight of what was once a tiny rival.
However, Amazon is not immune to the changes it has brought on the industry. Even some of its operations have started to slow. Ironically, both companies laid off workers recently.
CNBC reported that Barnes & Noble laid off workers because of poor holiday sales. When the company’s management announced results for the final nine weeks of last year, the report showed:
Total sales for the holiday period were $953 million, declining 6.4% as compared to the prior year. Comparable store sales also declined 6.4% for the holiday period, while online sales declined 4.5%.
At almost the same time, a reporter at the local newspaper in Amazon’s hometown wrote:
Amazon is laying off hundreds of corporate employees, a rare cutback for a company that has spent most of the last few years in a frantic growth spurt.
The layoffs, underway now, will fall on several hundred employees at the online retailer’s Seattle headquarters, along with hundreds more elsewhere in Amazon’s global operations, one person familiar with the cuts said. The layoffs are primarily focused on Amazon’s consumer retail businesses, according to two people familiar with the matter.
The consumer retail portion of Amazon is the one that so deeply wounded Barnes & Noble. What was once a new business for Amazon has gotten old as its races into more promising businesses such as online video streaming, cloud computing and consumer electronics.
The miracle of Amazon’s multidecade growth began with selling physical products online, which changed an industry. And now that has begun to move into Amazon’s rear-view mirror.