After 27 years at Amazon’s helm, Jeff Bezos is stepping down as CEO and handing the rains to Andy Jassy, the chief executive of Amazon Web Services. Bezos will transition into the role of Executive Chair of the Amazon Board most probably in the third quarter of 2021.
The founder of Amazon said that he is excited for this change. Hopefuly it will allow him more time to devote himself on outside projects. However, even though Jeff Bezos is stepping down as CEO, as the executive chair of the company he will still focus on new products and initiatives.
“Being the CEO of Amazon is a deep responsibility, and it’s consuming. When you have a responsibility like that, it’s hard to put attention on anything else. As Exec Chair I will stay engaged in important Amazon initiatives but also have the time and energy I need to focus on the Day 1 Fund, the Bezos Earth Fund, Blue Origin, The Washington Post, and my other passions. I’ve never had more energy, and this isn’t about retiring. I’m super passionate about the impact I think these organizations can have,” Bezos wrote.
Amazon Still Strong, but Troubles Ahead?
Although Jeff Bezos is stepping down as CEO, he will remain Amazon’s biggest shareholder. Currently he owns 10.6 percent of the company and he intends to stay on the board of directors. His decision to leave is completely personal.
“The role of CEO at a place like Amazon is an all-encompassing role, and it does leave little time for other things,” said Brian Olsavsky, Amazon’s finance chief.
The announcement came as part of Amazon’s fourth-quarter earnings report. Beating Wall Street projections in terms of both sales and profit, 2020 was a stellar year for the company as the pandemic significantly boosted its retail and cloud services. During last year, Amazon stock got a 69 percent increase in value.
While Bezos is leaving at a high point for Amazon’s business, the company faces serious challenges. Currently, the company is under investigation from lawmakers and regulators around the globe concerning whether it is unfairly wielding its clout.
The European Commission brought antitrust charges to Amazon. According to Europe’s premier competition institution, Amazon is breaking competition laws by forcing small retailers and merchants to depend on the company to reach their customers.
Also, recently Amazon accepted to pay USD 62 million to the U.S. Federal Trade Commission due to the charges that the company withheld tips to delivery drivers between 2016 and 2019. Last year, labor unrest shook the company, as workers complained about the working conditions during the COVID-10 pandemic.
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Who is Andy Jassy?
The new CEO of Amazon has long been a trusted lieutenant to Jeff Bezos. Andy Jassy began working at Amazon in 1997, while the company was still in its start-up phase. Since then, he rose through the ranks and took up different roles as the company grew.
Some twenty years ago, most people knew Jassy as Bezos’ shadow. This was because he was never far behind Amazon’s founder during meetings or business trips. Eventually, Jassy started working on Amazon Web Services – the company’s cloud computing business. During 2020, this part of Amazon made more than USD 45 billion in sales. This is a 30 percent increase in comparisson to the year before.
Who will be the next head of Amazon Web Services remains to be seen. However, we might learn who is Jassy’s successor in the coming months.
Matt McIlwain, managing director at Madrona Venture Group, one of Amazon’s early investors, noted that Jassy is the perfect choice for the next chief executive of the company. Still the news that Jeff Bezos is stepping down as CEO still came as a surprise.
“It seemed like Jeff, especially into the last year, had been more engaged in the business, so I didn’t think Jeff was ready. But I did think if Jeff was ready, Andy would be the one”, said McIlwain.
The Take-Away
Jeff Bezos is one of the last founders of big tech companies still to hold the CEO title. Founders of giants like Google, Oracle and Microsoft long since handed over the company reins – though Mark Zukerberg still leads Facebook.
Amazon’s cloud computing business is the company’s most profitable venture that powers the video-streaming site Netflix and many other companies. Even though this inspires confidence in terms of the future of Amazon under Jassy, his reign as CEO will be challenging.
“He’s deeply steeped in technology and a very seasoned executive in his own right. Amazon’s size makes some industries uncomfortable, some governments uncomfortable, and Andy Jassy will have to deal with the consequences. That will be some of the new era of his leadership,” said Gartner analyst Ed Anderson.
