Stock Watch: Layoffs Drag Amazon.com Down

On Friday, Amazon.com (Nasdaq: AMZN) confirmed that it laid off about 150 employees, or about two percent of its workforce. While analysts did not seem concerned about the news, shares of Amazon.com tumbled nearly eight percent on Friday, falling 5-1/14 to 61-11/16. Granted, this development came on a day when all three of the major stock indices bled, with the Nasdaq tumbling 3.8 percent.

While the layoffs themselves might not be a cause for anxiety among many investors, what should have investors a bit worried is the recent stock meltdown of many business-to-consumer companies. The most notable of this category is eToys, which closed Friday at an all-time low of 16-1/16. Clearly, investors are becoming increasingly impatient with companies that report growing losses. Amazon.com, of course, is known for doing exactly that.

Many observers thought that the holiday season would validate the biggest online retailers, but even though sales were sharply up, the shine seems to be off many of the stars. Amazon.com could be a volatile stock this week. The company reports earnings on Wednesday.

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