SEATTLE – When Jeff Bezos started an online bookseller called Amazon in 1994, he said the question he was asked most often was “What is the internet?”
Mr Bezos responded by turning Amazon into a $ 1.7 trillion giant, selling so many different items online that it became known as the “Anything Store”. In doing so, he stirred up the retail sector, turned Amazon into a logistics giant and expanded to include cloud computing, streaming entertainment and devices with artificial intelligence. For a while he was the richest person in the world.
On Tuesday, 57-year-old Bezos said his run at the helm of the Seattle-based company was over.
When Amazon reported on its latest blockbuster financial results, Bezos said he plans to hand over the reins this summer and move into the role of executive chairman. Andy Jassy, 53, managing director of Amazon’s cloud computing division, has been promoted to head of the entire company. The change will take effect in the third quarter starting in July.
“As much as I type tap dancing into the office, I’m excited about this transition,” wrote Bezos in an email to Amazon employees. As chairman of the board, he intends to “focus my energy and attention on new products and early initiatives.”
The changing of the guard will extend beyond Amazon, which Mr. Bezos has embodied for more than two decades. His influence on the American company and reshaping the way goods are sold made him one of the most influential technology and business leaders in the world, best known as the founders of Apple and Microsoft, Steve Jobs and Bill Gates. Mr. Bezos’ personal net worth also rose to $ 188 billion, topped by Elon Musk just last month.
In recent years, Mr. Bezos had resigned from much of the day-to-day running of Amazon and delegated these responsibilities to two main MPs, including Mr. Jassy. Instead, he had focused on the future of Amazon and personal projects. In 2013, he bought the Washington Post and said he spends more than $ 1 billion annually on Blue Origin, his space company.
He also divorced two years ago and has become a staple of tabloids gushing over his increasingly visible social life, including on superyachts owned by billionaires like Barry Diller.
But the pandemic pulled Mr. Bezos back into day-to-day operations at Amazon last spring. While Amazon was grappling with a flurry of e-commerce demand, labor unrest and supply chain challenges caused by the coronavirus, Mr Bezos called daily to make inventory decisions, spoke to government officials, and did a lot noted visit to one of Amazon warehouses.
Amazon has now stabilized and grown as more people turned to the company’s e-commerce and Prime Fast Shipping program, which has more than 150 million members. Amazon posted record fourth-quarter sales of $ 125.6 billion on Tuesday, while earnings more than doubled year over year to $ 7.2 billion. It was the first time the company had sales over $ 100 billion in a single quarter.
Amazon is showing no sign of withdrawing from its ambition to penetrate further corners of the economy. Speaking to investment analysts, Brian Olsavsky, Amazon’s chief financial officer, said the times when the company “pre-invested” before future growth had paid off. He said Amazon will continue to spend more on cloud computing infrastructure and groceries, and expand its logistics activities – particularly its fast-growing last-mile delivery network, the delivery of which depends on half a million contract drivers.
Mr Bezos is not expected to disappear from Amazon. “Jeff’s really not going anywhere,” said Olsavsky, adding that the change “was more of a restructuring of who does what”.
Mr. Bezos will remain the largest shareholder in Amazon – he owns 10.6 percent of the company according to files – and will remain on the board of directors.
His departure as managing director was “a personal decision for him,” said Olsavsky. “The role of the CEO in a place like Amazon is a big one, with little time left for other things.”
Other internet company founders who have become the world’s largest digital gatekeepers have also stepped back from their day-to-day responsibilities as their fortunes grew and more energy was put into personal projects. In 2019, Larry Page and Sergey Brin, the Stanford graduates who founded Google, left their leadership positions at Google’s parent company Alphabet. They handed the reins to a protégé, Sundar Pichai.
As Mr. Bezos hits a peak for Amazon’s business, the company faces numerous challenges. Amazon is increasingly being scrutinized by lawmakers and regulators around the world to see if it is misusing its clout.
In November, the regulators of the European Union filed antitrust lawsuits against Amazon. The company violated competition laws by using its size and access to data to harm smaller retailers who rely on the company to reach customers. And earlier Tuesday, Amazon agreed to pay $ 62 million to the Federal Trade Commission to settle fees that were withheld from driver tips between 2016 and 2019.
Amazon is also grappling with growing labor unrest as its workforce has grown to 1.3 million employees. Over the past year, some of the company’s warehouse workers expressed discomfort about security conditions during the pandemic, forcing Amazon to take immediate action and stop it even more aggressively. More recently, employees at an Amazon fulfillment center in Bessemer, Alabama, have tried to organize a union.
And the competition remains tough. Walmart, the country’s largest retailer and an industry-changing force in itself, recently featured a competitor by the name of Walmart + on Amazon Prime. The company has made huge investments in talent and technology to keep up with Amazon, purchasing Jet.com and a number of other e-commerce companies.
The announcement from Amazon marks the second major change in management last year. In August, Jeff Wilke, the executive director of Amazon’s giant consumer business, said he plans to retire in early 2021 after more than two decades at the company. Dave Clark, who ran the fulfillment and logistics department, has been promoted to replace him.
Mr. Jassy has long been a trusted lieutenant to Mr. Bezos. Mr. Jassy, who grew up in New York, joined Amazon in 1997 when it was still a start-up and took on various roles as the company expanded.
In the early 2000s, Mr Jassy became Mr Bezos’ “shadow” and accompanied him to meetings and business trips. He eventually laid the foundation for Amazon Web Services, the cloud computing business that he developed into an engine for innovation and profit. The cloud business generated revenue of $ 45 billion last year, up 30 percent over the previous year.
Mr. Jassy and Mr. Clark have spent most of their careers at Amazon and are deeply rooted in its unique corporate culture. Mr. Olsavsky said the board of directors discussed succession planning at least every year and that the “by-product” of this was evident in the company’s structure and the growing number of employees on the executive team.
Mr Olsavsky said Amazon will announce Mr Jassy’s successor as head of the cloud business in the coming months.
“You really had to choose someone for this company, and Andy is the perfect choice,” said Matt McIlwain, managing director of Madrona Venture Group, an early Amazon investor.
Mr McIlwain said he was a little surprised at the timing of the transition but not at the outcome.
“It seemed like Jeff was more involved in the business, especially last year, so I didn’t think Jeff was ready,” he said. “But I thought if Jeff was ready, Andy would be the one.”
Sapna Maheshwari contributed to the coverage.