With Jeff Bezos stepping down as CEO of ecommerce giant Amazon, the man set to replace him, Andy Jassy, will inherit a vast empire and face great expectations.
Since founding Amazon in 1994, Jeff Bezos has steered Amazon’s growth from a loss-making online bookseller to a disruptive force worth $1.7 trillion. Having reshaped retail and firmly embedded ecommerce into consumer habits, the company has expanded into logistics, cloud computing and AI-enabled devices, in addition to streaming entertainment. On February 2, Bezos announced that Andy Jassy, CEO of the cloud computing division, Amazon Web Services (AWS), will take the helm in July. Bezos will remain on the board as Executive Chairman, and as Amazon’s biggest shareholder.
Jassy joined Amazon back in 1997, fresh from Harvard Business School, and held various executive roles over the years. Thus his business philosophy was forged in the furnace of Amazon’s particular corporate culture, which espouses constant change. He has been working closely with Bezos since the early 2000s and was seen by many as the founder’s heir apparent. This is largely due to the stellar performance of AWS, which he founded in 2003, and has headed since 2016. Jassy’s appointment to replace Bezos also hints at the importance of cloud computing to the biggest technology firms. AWS competes with the cloud arms of Microsoft, Google and other heavy-hitters.
There is good reason to have confidence in Jassy; nonetheless the departure of Bezos will reverberate throughout the organization and beyond. In recent years Bezos has gradually left day-to-day operations to senior executives such as Jassy, shifting to the big picture of Amazon’s future. Now he intends “to focus my energies and attention on new products and early initiatives,” such as his space travel company, Blue Origin.
Bezos was called back to the mother ship’s daily operations when the pandemic struck last spring. A tidal wave of consumer demand coincided with labour issues, and as with most businesses, supply chain challenges. Bezos became a hands-on chief executive once again, getting involved with inventory concerns and communicating with government officials.
The change in leadership comes at a time when Amazon’s business is soaring, thanks to a big boost in ecommerce brought about by the pandemic. On the day of the announcement, the company also released its 2020 financial results – which included $125.6 billion in sales for the fourth quarter, marking the first $100 billion-plus sales quarter in Amazon’s history. Profits more than doubled from last year, reaching $7.2 billion.
Jassy is inheriting a flourishing empire, but Amazon is not without challenges. Lawmakers and regulators worldwide have the company in their crosshairs. The New York Times notes that in November, E.U. regulators brought antitrust charges against Amazon, saying the company broke competition laws. This month it settled charges made by the U.S. Federal Trade Commission, agreeing to pay $62 million. As Amazon’s workforce has swelled to 1.3 million employees, its labour troubles persist. Competition in the retail industry keeps intensifying, notably from Walmart, which continues to make big strides in ecommerce.
As for what’s next, Chief Financial Officer Brian Olsavsky said that Amazon will continue spending more on cloud computing infrastructure and the grocery business, and expand its logistics operations. “Jeff is really not going anywhere,” Olsavsky said, adding that the change in leadership is “more a restructuring of who is doing what.”
