Seattle — Amazon CEO Jeff Bezos will step down from his post in the third quarter of 2021 and be replaced by Andy Jassy, the head of the company’s cloud computing unit.
Jassy, for years, has been seen as a potential successor to Bezos, who founded the company as an online bookstore from his Seattle garage more than 25 years ago and became one of the world’s wealthiest men. Jassy’s likelihood as successor seemed inevitable in 2020 when Jeff Wilke, who was the consumer business chief and was also seen as a CEO candidate, announced he’d be leaving in 2021.
Bezos, the company’s driving force since its founding, will become executive chair, Amazon said in a statement on Tuesday.
The transition comes at time when Amazon seems unstoppable, fueled by record sales amid the pandemic and generating huge cash and profits from Amazon Web Services (AWS), which Jassy helped create and manage. The incoming CEO, who has been at Amazon since 1997, is likely to keep the company on its current path. And Bezos isn’t going far, much the way Bill Gates remained chair of Microsoft after ceding the CEO role.
“When you look at our financial results, what you’re actually seeing are the long-run cumulative results of invention,” Bezos said in a statement. “Right now, I see Amazon at its most inventive ever, making it an optimal time for this transition.”
Bezos’s new role will let him focus on innovation, which he is passionate about, without getting encumbered by the day-to-day operations of a global empire that is the target of regulatory scrutiny on multiple continents and criticisms about its treatment of low-wage workers. Bezos can turn more of his attention to the most promising ideas that deserve Amazon’s deep pockets, as well as his other interests, including ownership of the space exploration company Blue Origin and the Washington Post, and causes such as climate change.
Bezos has a net worth of nearly $200bn, making him the second-wealthiest man in the world behind Elon Musk, who supplanted Bezos in the top spot in January.
Blockbuster quarter
The reaction on Wall Street was mostly positive, as Amazon turned in another blockbuster quarter and solid guidance.
Revenue will be $100bn to $106bn in the quarter toe end-March, the company said in a statement on Tuesday. Amazon projected operating income of $3bn to $6.5bn. Analysts, on average, estimated profit of $6.07bn on sales of $95.72bn.
The online retailer reported that fourth-quarter sales jumped 44% to $125.6bn, beating analysts’ average estimate of $119.7bn. Earnings were $14.09 per share, compared with analyst projections of $7.34. The shares were little changed in post-market trading.
Still, investors remain mindful of Amazon’s rising expenses. Costs related to Covid-19, which include lost productivity due to social-distancing as well as stepped up cleaning throughout its warehouses and shipping centres, will add $2bn to expenses in the current quarter, Amazon said.
Jassy, who served as a technical adviser to Bezos earlier in his career, is cut from the same cloth as his boss, current and former colleagues say. He prefers data-driven decision-making and puts customers at the centre of the company’s thinking. Jassy is also known as an occasional micro-manager on projects close to his heart, another trait he has in common with Bezos. Colleagues are impressed with his ability to recall small details about projects from meetings held long ago.
Jassy’s rise to CEO is probably bad news for companies such as Oracle, Microsoft and Google that compete with Amazon in cloud computing, said Sucharita Kodali, an analyst at Forrester. “Andy Jassy, for almost two decades now, has focused on the AWS side of Amazon,” she said. “CEOs focus on their babies. If I were Oracle or Google or Microsoft, I’d be more nervous.”
Bloomberg
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