Amazon is sued by Gilimex- a Vietnamese supplier for breaching agreement

Gilimex Inc.- a Vietnamese supplier of warehouse storage systems filed a $280 million lawsuit on Monday, December 12, in New York state court against Amazon.com Inc., claiming the e-commerce giant abruptly reduced orders leaving the manufacturer with surplus manufacturing capacity and raw materials.

According to Gilimex Inc., as a key partner of Amazon from 2014 to , the company invested tens of millions of dollars in manufacturing facilities to build the steel-and-cloth storage pods used to organize inventory in Amazon warehouses. Those pods are carried by robots, speeding the fulfillment of online orders so workers don’t have to race around the sprawling facilities on foot.
The lawsuit somehow reveals Amazon’s relationships with suppliers which helped the ecommerce giant to fuel its rapid expansion during the pandemic. But it also shows that these relationships pose great risks to suppliers. Based on the 32-page complaint, the partnership was built around «trust,» which made Gilimex rely on the accuracy of Amazon’s forecasts to make necessary investments to meet Amazon’s demand.

Since many people sheltered at home and spent much more money online during the pandemic, Amazon’s sales soared and hit new records. The first quarter of 2021 witnessed a 220% increase in Amazon’s profits. As a result, Gilimex increased to more than 7,000 personnel across multiple factories to build more than 1 million warehouse storage units annually in response to the ecommerce giant’s demand. Over the course of the eight-year partnership, Gilimex’s production for Amazon surged 20-fold.
Gilimex claimed that it has a long-standing agreement with Amazon regarding transparency about anticipated demand in order to secure the supplies, factory capacity, and employees needed to meet Amazon’s expansion. However, Amazon “immediately changed and reduced the projected demand” for the remaining months of and 2023 to a tiny portion of earlier projections in April and May.

According to the lawsuit, Amazon was Gilimex’s biggest client, with purchases worth $146.6 million in 2021. In order to satisfy Amazon’s demands, Gilimex ignored other significant clients including IKEA and Columbia Sportswear.
Gilimex had to relocate its production and packing facilities in order to continue manufacturing through Covid outbreaks and navigate around government safety regulations in order to meet Amazon’s demands during the pandemic.
Gilimex said in the lawsuit: «Thus, while Amazon enjoyed unprecedented increases in revenue during the pandemic due in large part to the explosion in online ordering by consumers from the safety and comfort of their homes, Gilimex management and laborers literally risked their lives on a daily basis to make such record growth a reality,» .

Amazon has not yet responded to Gilimex’s complaints. In an effort to reduce costs, the company started phasing out experimental projects and laid off 10000 employees this fall. This cost-reduction is projected to go until 2023.

Google’s Bard AI Chatbot Takes a Leap Forward with Major Expansion

Alibaba’s AI-Powered Renaissance Amidst New Leadership and Market Challenges

TikTok Hit with €345 Million Fine in Europe for Child Privacy Violations

China’s Economy Shows Signs of Recovery, but Real Estate Remains a Concern

Arm’s China Conundrum and the Risks in its $5 Billion IPO

Arm, the renowned British chip designer under the SoftBank umbrella, is gearing up for a high-stakes $5 billion initial public offering (IPO). While excitement surrounds this significant move, investors are growing increasingly wary of Arm’s business ties to China, particularly amidst escalating tensions between the United States and Beijing over chip technology. Let’s dive into the complexities of Arm’s China dealings and the challenges it faces.

Shining a Light on AI ‘Ghost’ Staff: US Lawmakers Probe Tech Giants

In an era marked by the rapid advancement of artificial intelligence (AI), the invisible hands behind the scenes, often referred to as “ghost workers,” have come into the spotlight. These are the individuals responsible for labeling data, rating responses, and performing crucial tasks that train AI algorithms.

Apple’s iPhone 15 Unveil: What to Expect

Apple enthusiasts and tech enthusiasts alike are eagerly anticipating Apple’s annual September keynote event, where the company is set to unveil its latest iPhone lineup, including the highly anticipated iPhone 15. With the event just around the corner, here’s a sneak peek into what we can expect from Apple’s big reveal.

Tesla’s Dojo Supercomputer and the $500 Billion Market Value Surge

Tesla Inc. has long been a pioneer in the electric vehicle (EV) industry, and its innovations continue to send shockwaves through the financial world. Recent predictions by analysts at Morgan Stanley suggest that Tesla’s Dojo supercomputer could be the catalyst for a massive $500 billion surge in the company’s market value. This article delves into the details of this remarkable prediction and the potential impact of Dojo on Tesla’s future.

Biden’s Vietnam Visit: Promoting Global Stability and Strengthening Alliances in Asia

The Evolution of the Eight-Hour Workday in the United States

Navigating the Intersection of Tech Trends, Security, and Hybrid Work in 2023

The ever-evolving landscape of consumer technology has seen significant shifts in 2023, with a strong focus on security and the continued adoption of hybrid work models. These trends, as highlighted in the fourth annual Deloitte Connected Consumer survey, reflect not only consumer preferences but also their impact on the workplace. As economic uncertainty persists and remote and hybrid work models gain traction, tech companies and business leaders must adapt to meet the changing needs of their employees and customers.

China Enforces iPhone Ban for Government Officials Amidst Growing Tech Tensions

According to sources familiar with the matter as reported by The Wall Street Journal, China has recently implemented a ban on the use of iPhones by central government officials. This ban has been communicated to staff members through various means, such as chat groups or meetings.