Apple, Amazon and Facebook warn of pandemic, civil unrest

Tech companies had more to report Thursday night than the billions in profits they generated last quarter.

They also painted a dire picture of the world as we move into the winter months with soaring Covid-19 cases in the United States and Europe, and the potential for a much contested presidential election.

To recap:

Amazon goes spend $ 4 billion on Covid-related expenses this trimester. It’s the same investment it made at the start of the pandemic when the country locked down and turned to online shopping instead. Amazon will spend the money testing employees for the virus, cleaning up facilities, and making other changes it needs to keep things working in the world of Covid. Amazon is on track to spend $ 11 billion for the year just to fight Covid-19.

The company also said it could not accurately predict its operating profit for this quarter due to the uncertainty caused by the pandemic. Amazon gave extremely broad indications, forecasting between $ 1 billion and $ 4.5 billion. Who knows where it will actually land.

Apple CEO Tim Cook said the rise in Covid-19 cases made it difficult for the company to provide sales advice for this quarter. “If you look at the number of cases, the number of cases is increasing in Western Europe,” Cook told CNBC’s Josh Lipton on Thursday. “They’re climbing in the United States. And so there’s still a sufficient level of uncertainty there … we don’t think that’s an environment to steer us into.”

With lockdowns restarting in countries like France and Germany, it’s increasingly doubtful that people will even be able to buy the world’s hottest gadget in the coming months.

Facebook CEO Mark Zuckerberg has warned of civil unrest after election day next week. Facebook’s core business isn’t shipping and building things, so Zuckerberg’s fourth quarter warning was different from his peers, but it was just as terrible.

“I fear that with our nation so divided and the election results potentially taking days or weeks to finalize, there is a risk of civil unrest across the country,” Zuckerberg said Thursday night on Facebook. “With this in mind, companies like ours need to go way beyond what we have done before.”

He also warned of “an increased risk of violence and unrest”.

These warnings come from some of the most savvy business leaders in the world, with tons of data on the state of their businesses and decades of experience managing crises. They have billions of dollars in market value at stake. They are now sounding the alarm bells for their investors, demonstrating that they are willing to invest the resources necessary to keep moving forward even if the rest of the world crumbles.

These companies have the money to weather the storm. They will be fine. They can spend billions adjusting their shipping networks (Amazon), reshaping their retail and manufacturing operations (Apple), and tweaking their algorithms to suppress calls for violence and unrest (Facebook).

It is not the same for the rest of the country. Small businesses like restaurants and retail outlets are grappling with pandemic restrictions with no stimulus bill in sight, while political parties and their most ardent supporters focus on winning the election. As big tech companies go into panic mode, the US government has decided to stall until after the election to decide whether or not to provide aid.

If you want to see a clear example of the economy’s K-shaped recovery, look no further than Big Tech companies. They win, while the millions of people who depend on small businesses for their livelihoods lose.