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 that sold 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 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.
As Amazon reported its latest set of Blockbuster financial resultsMr Bezos said he plans to hand over the reins this summer and switch to the role of chairman of the board. Andy Jassy, 53, the executive 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 the 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 only surpassed by Elon Musk last month.
In recent years, Mr. Bezos had resigned from much of the day-to-day running of Amazon and delegated these duties to two main MPs, including Mr. Jassy. Instead, he had focused on the future of Amazon and personal projects. In 2013 he did bought the Washington Postand has said that he spends over $ 1 billion annually on Blue Origin, his space company.
But the pandemic pulled Mr. Bezos back in the daily operations of Amazon last spring. As Amazon grappled 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 met a highly regarded visit to one of Amazon’s 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 that the days 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 – especially its fast-growing last-mile delivery network that depends on it half a million contract drivers Deliver packages.
Mr Bezos is not expected to disappear from Amazon. “Jeff’s really not going anywhere,” said Olsavsky, adding that the change “is 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 records – and will remain on the board of directors.
His departure as managing director was “a personal decision for him,” said Olsavsky. “The CEO role in a place like Amazon is a big one and there is little time left for other things.”
Other internet company founders who have grown to become the world’s largest digital gatekeepers have also stepped back from their day-to-day responsibilities as their fortunes grew and they put more energy into personal projects. In 2019 Larry Page and Sergey BrinThe Stanford graduates who founded Google have left their leadership positions at Google’s parent company Alphabet. They handed the reins to a protégé, Sundar Pichai.
As Mr. Bezos reaches 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, European Union regulators have levied antitrust fees Against Amazon, the company has violated competition laws by using its size and access to data to harm smaller merchants who rely on the company to reach customers. And earlier on Tuesday Amazon agreed to pay $ 62 million to the Federal Trade Commission to settle fees withheld from tipping delivery drivers 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 be even more aggressive. More recently, they worked for an Amazon fulfillment center in Bessemer, Ala try to organize a union.
And the competition remains tough. Walmart, the country’s largest retailer and an industry-changing force in itself, recently unveiled a competitor called Amazon Prime Walmart +. It has made huge investments in talent and technology to keep up with buying from Amazon Jet.com and a ton of other ecommerce companies.
Amazon’s announcement marks the second major change in leadership last year. In August, Jeff Wilke, the managing director of Amazon big consumer businesssaid he planned to retire in early 2021 after more than two decades at the company. Dave Clark, who led the fulfillment and logistics division, 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 his career 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, general manager of Madrona Venture Group, an early Amazon investor.
Mr McIlwain said he was a bit 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 Contribution to reporting.