In this article we are going to list the 15 biggest companies that aren’t profitable. Click to skip ahead and jump to the 5 biggest companies that aren’t profitable. People start businesses because they don’t want to carry on with the 9-5 slog at best, though in today’s world in most developing countries, 8 hours a day doesn’t even come close to cutting it. And all this effort and bearing rush hour traffic throughout your life only to have to live pay check to pay check and the moment, say a pandemic hits, and businesses are closed and the next day you’re out of a job and don’t know where your next meal will come from. This what allures many people to start businesses, where the work is much harder but then you are earning money for yourself and not for anyone else.
This brings us to the main point of starting a business; making profits at a far larger scale than a simple standard working class pay check and working for yourself instead of anyone. This is why it seems counterintuitive that companies, especially major companies, could go on for decades while often making losses. Look, everyone knows that when you start a business, the first few years are not going to be profitable at all. This is why you need investment from people who will buy into your vision, and you slowly work on converting those losses to profits as times goes by and provide a decent return on the investment that other people have made in your business.
The best example of this, and perhaps the most extreme as well, would be Amazon (NASDAQ:AMZN). From its inception in 1994, up till just a few years ago, Amazon remained unprofitable. This seems an insane thing to say about perhaps one of the most popular companies in the world and certainly one of the most influential but it is definitely true. The reason behind this is that Amazon, over the years, kept making sales at extremely low and competitive prices to entice customers to switch over to the company rather than whatever retailer they were initially going with. This has led to Amazon gaining a significant market share in e-commerce especially over the past decade, which in turn has led to economies of scale allowing Amazon to further provide subsidized prices to customers and gain even more share. This has allowed Amazon to also invest in other businesses such as its cloud service platform, which is one of the biggest in the world, and has allowed it to finally become profitable. Another advantage of the losses I mentioned earlier? Amazon now earns profits of billions of dollars and still doesn’t have to pay income tax on it, due to the losses of previous years being carried forward and being set off against the profits of the current year, making it the biggest company in the world to not pay taxes.
However, Amazon is perhaps the exception to the rule rather than the rule itself. The goal of the vast majority of the companies in the world is to make money and make as much of it as they can to appease their shareholders. However, in a world which is as globalized and competitive as ours, even the biggest of companies are not exempt from making losses, even if their revenues are in the tens of billions of dollars.
Many of the companies in our list are state-owned, which is one reason why they are loss making. State owned companies main objectives surpass profits and include providing a service which is affordable to all residents, with the government absorbing the losses the company makes. However, it should also be noted that many state owned companies are simply victims of inefficiency and corruption, which is why they fail to make profits which I can say with confidence, being from a developing country whose state owned corporations are plagued by this issue.
To come up with the list of the biggest companies that aren’t profitable, we considered the Fortune Global 500 list for 2020, which has the names of the biggest companies in the world. From this list, we took out the companies which made losses during 2019, and then ranked these companies based on their revenues, assets and employees, with preference given to revenues. Using multiple metrics allowed us to come up with an incredibly accurate list. It is important to note of course that this list is based on 2019 revenues, before the pandemic had disrupted the world. When we update this list for 2020, there will a lot more companies to choose from, as the economic downturn in 2020 has twisted the fortunes of the elite. But till then, let’s take a look at the biggest companies unable to become profitable, starting with number 15:
15. Vale (NYSE:VALE)
Total revenue of the company in 2019 (in millions of dollars): 37,570
Total assets of the company in 2019 (in millions of dollars): 91,713
Total employees of the company in 2019: 71,149
Total losses of the company in 2019 (in millions of dollars): 1,683
One of the biggest mining companies in the world, Vale is a Brazilian company which is the biggest nickel and iron ore producer in the entire world.