Jeff Bezos resigns as CEO of Amazon, promoting Andy Jassy

SEATTLE – When Jeff Bezos started an online book-selling company called Amazon in 1994, he said the question he was most often asked was “What is the Internet?”

Mr Bezos responded by building Amazon into a huge $ 1.7 trillion conglomerate that sells so many different items online to the point of being called an “everything store.” In the process, he grew retail, turned Amazon into a logistics giant, and expanded into cloud computing, online entertainment, and AI-enabled devices. For a while, he was the richest man in the world.

On Tuesday, Mr Bezos, 57, said his running at the helm of the Seattle-based company was over.

When Amazon reported on its latest series of blockbuster financial results, Mr Bezos said he plans to hand over power this summer and move on to the role of executive chairman. Andy Jassy, ​​53, CEO of Amazon’s cloud computing division, will be promoted to run the entire company. The change will take effect in the third quarter starting July.

Mr Bezos wrote in an email to Amazon employees: “Even though I’m still jumping into the office, I’m excited about the transformation. As executive chairman, he said, he plans to “focus my energies and attention on new products and early initiatives.”

The guardian change is set to spread beyond Amazon, where Mr. Bezos has personified for more than two decades. His impact on American business and rebuilding the way he sells has made him one of the most influential business and technology leaders in the world, as well as the founders of Apple and Microsoft, Steve Jobs and Bill Gates. His personal fortune also skyrocketed to $ 188 billion, a figure surpassed only by Elon Musk last month.

In recent years, Mr. Bezos has backed away from much of Amazon’s day-to-day business, handing that responsibility over to two chief vice-officers, including Mr. Jassy. Instead, he focuses on Amazon’s future and personal projects. In 2013, he bought The Washington Post and said he spends more than $ 1 billion a year on Blue Origin, his space travel company.

Two years ago, he also got divorced and became a fixture of tabloids, which criticized his increasingly apparent social life, including on owned super yachts. of billionaires like Barry Diller.

But the pandemic pulled Mr. Bezos back into daily Amazon operations last spring. As Amazon struggled with massive demand for e-commerce, labor unrest, and supply chain challenges caused by the coronavirus, Mr. Bezos held daily calls to help make decisions. about inventory, talk to government officials and make a public visit to an Amazon warehouse.

Amazon has now stabilized and strong growth as more people turn to e-commerce and the company’s Prime Express shipping program, which has more than 150 million members. On Tuesday, Amazon posted record revenue of $ 125.6 billion for the fourth quarter, while profits more than doubled to $ 7.2 billion from a year earlier. It was the first time the company had sales exceeding $ 100 billion in a quarter.

Amazon shows no signs of retreating from its ambitions to penetrate many nooks and crannies of the economy. In a call with investment analysts, Brian Olsavsky, Amazon’s chief financial officer, said the time the company has “pre-invested” in the face of future growth has paid off. He said Amazon will continue to spend more on cloud infrastructure and grocery stores, and expand logistics – especially the rapidly growing last-mile delivery network, depends on half a million contract drivers for the delivery of packages.

Mr Bezos is not expected to disappear from Amazon. “Jeff really isn’t going anywhere,” said Olsavsky, adding that the change is “more restructuring of who is doing what”.

Mr Bezos will remain Amazon’s largest shareholder – he owns a 10.6% stake in the company, according to the filing – and on the board of directors.

Olsavsky said that leaving the position of chief executive was “a personal decision for him. “The CEO role in a place like Amazon is an overarching one and it doesn’t leave a lot of time on other things.”

The other founders of internet companies that have become the world’s largest digital gatekeepers have also stepped back from everyday responsibilities as their fortunes increased and they put more energy into projects. personal. In 2019, Larry Page and Sergey Brin, Stanford graduates, founders of Google, left executive roles at Google’s parent company, Alphabet. They give the reins to a guard, Sundar Pichai.

While Mr. Bezos is leaving high positions for Amazon’s business, the company faces many challenges. Amazon is under increasing scrutiny by lawmakers and regulators around the world for whether it is using its influence unjustly.

In November, European Union regulators filed antitrust charges against Amazon, saying that the company violated competition laws by using the scale and access to its data. to harm the smaller merchants that rely on the company to reach customers. And earlier on Tuesday, Amazon agreed to pay $ 62 million to the Federal Trade Commission to settle the fees it withholds tips for delivery drivers between 2016 and 2019.

Amazon also faces growing labor unrest as its workforce has grown to 1.3 million employees. Last year, some of the company’s warehouse workers expressed frustration with safety conditions in the wake of a pandemic, forcing Amazon to take urgent action and even hiring more aggressively. More recently, workers at an Amazon fulfillment center in Bessemer, Ala., Tried to organize a union.

And the competition is still fierce. Walmart, the nation’s largest retailer and industry-transforming force, recently introduced a competitor to Amazon Prime called Walmart +. It has invested heavily in talent and technology to catch up with Amazon, buy Jet.com and a host of other e-commerce companies.

Amazon’s announcement marked the second biggest executive transformation at the company in the past year. In August, Jeff Wilke, chief executive of Amazon’s large consumer business, said he planned to retire in early 2021 after more than two decades with the company. Dave Clark, who operates logistics and transportation operations, is promoted to replace him.

Mr. Jassy has long been a trusted lieutenant for Mr. Bezos. Mr. Jassy, ​​raised 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 the “shadow” of Mr. Bezos, accompanying him to meetings and business trips. Ultimately, he laid the foundations for Amazon Web Services, the cloud business, which he developed into a profitable and innovative engine. The cloud business generated $ 45 billion in revenue last year, up 30% from a year earlier.

Mr. Jassy and Mr. Clark have spent most of their careers at Amazon and delve deeply into its unique corporate culture. Mr. Olsavsky says that the board has been discussing succession planning at least every year and its “byproducts” are evident in the company’s structure and the growing number of people in the team. senior leadership.

Olsavsky said Amazon will announce a successor to Mr. Jassy as head of the cloud business in the coming months.

“You really have to choose someone in this company, and Andy is the perfect choice,” said Matt McIlwain, chief executive at Madrona Venture Group, an Amazon early investor.

Mr McIlwain said he was a bit surprised at the transition time, but not the results.

“Looks like Jeff, especially last year, was more involved in the business, so I don’t think Jeff is ready,” he said. “But I thought if Jeff was ready, Andy would be who.”

Sapna Maheshwari Contribution reports.