The End of an Era at Amazon: Jeff Bezos is stepping down from CEO position
Business magnate and previous owner of the title ‘Richest man in the world’ Jeff Bezos has stepped down as chief executive of Amazon. It really is the end of an era, one that saw this man transform a small, online bookstore into possibly the biggest and most powerful business in the world. From Amazon Prime to questions of unfair monopolization, indescribable wealth to AWS, Jeff Bezos was one of the most infamous and cunning businessmen of the last decade.
Shortly after being overtaken by Elon Musk in the list of ‘Richest people in the world’, on the 2nd of February Bezos announced his decision to step down from his position as CEO of Amazon sometime in the third quarter, and the CEO of subsidiary business Amazon Web Services (AWS) Andy Jassy will be replacing him. He will not be leaving the company, however; he will just be demoting himself to executive chairman. "This journey began some 27 years ago. Amazon was only an idea, and it had no name," Bezos proudly wrote in a letter to his employees. "The question I was asked most frequently at that time was, 'What's the internet?' ... Today, we employ 1.3 million talented, dedicated people, serve hundreds of millions of customers and businesses, and are widely recognized as one of the most successful companies in the world."
This seemed to be a dream exit for Bezos, much like a sportsman winning a trophy amidst their decision of retirement. The news came as part of Amazon’s fourth quarter earnings report. Amazon smashed through Wall Street analysts’ projections for both sales and profit, capping off a brilliant year for both retail and cloud, much owed to the restrictions of the pandemic. Amazon had boosted their quarterly net sales by 44% from the same period in the prior year to a total of $125.6 billion. Net income in the quarter came to $7.2 billion, nearly double Wall Street projections and well over double the same-time-last-year period. Amazon Web Services also had a quarterly revenue boost of 28% from last year, to $12.7 billion, and it seems well on its way to being a $50 billion revenue company.
Bezos was happy with his decision, stating that it gave him time to focus on other outside projects. "Being the CEO of Amazon is a deep responsibility, and it's consuming," Bezos wrote. "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 also added that he believes Jassy will be ‘an outstanding leader, and he has my full confidence.’
Andy Jassy, CEO of Amazon Web Services, was the obvious man for the job, especially after Amazon veteran Jeff Wilke’s retirement back in August. He carried AWS to an incredible revenue boost this quarter and has helped them become the world’s largest cloud computing supplier. He is also a long-time member of Amazon’s elite leadership group. The cloud computing market is expected to only expand in the coming years, especially with the pandemic pushing many businesses to adopt cloud, and in our world’s gradual digitization period, we will not be surprised to see cloud computing become the norm in a few years.
However, it isn’t all goldilocks for Jassy. He will have to step into this role under massive pressure; of course, the pressure of becoming CEO of the biggest tech company in the world; but also, the pressure of various antitrust claims by the House and the EU. The House Judiciary subcommittee concluded a 16-month investigation in October, and found Amazon, Apple, Facebook, and Google guilty of enjoying monopoly power. This leaves him with a huge dilemma which is very tough to handle. Rep. Ken Buck, R-Colo., a member of the committee, tweeted ‘I have some questions for Mr Jassy’ perhaps hinting at an immediate hurdle for him as soon as he steps into the position. How will he handle these monopolization claims without damaging Amazon’s growth and progress? We will have to wait and see.
Some of Amazon’s biggest projects which will be left to Jassy include video games. Amazon Game Studios have been throwing $500 million a year at the development of blockbuster games, however none have been a hit. Jassy reported that he is still very much invested in this.
Jassy will also be expected to contribute to the scaling of Amazon’s grocery business, Amazon Fresh. Its food delivery operation is already booming, and they are looking to boost it more on top of adding to the brick-and-mortar stores opened in California and Illinois last year.
Amazon will also be aiming to complete the construction of their second headquarters in Arlington. Its concept is an ice cream cone shaped, plant filled workspace. The cloud unit has run many data centres and offices in North Virginia, so it is a region that Jassy knows well.
He will also be expected to compete with Netflix in spending billions on shows and movies for Amazon Studios. This, on top of Prime Video, means that Amazon has gone Hollywood, and their monopolization spree continues.
Bezos once predicted that Amazon would be delivering packages by drone in 2018. 3 years later and their drone technology has improved, but still no drones delivering boxes to our door just yet. Jassy will be expected to deliver upon Bezos’ promise.
Amazon have also started an online pharmacy, along with neighbourhood clinics for employees. Analysts predict even larger moves in the healthcare sector. CNBC reported that an R&D team under Jassy has even set a goal of curing the common cold.
Finally, he will also be expected to scale up the production of home technology at Amazon. Ever since the launch of Alexa, Amazon have been developing and investing in more and more technology for home needs, and we could be looking at a completely digital home by the end of the decade.
And of course, moreover he will also be investing time into the main Amazon business and cloud computing. The sheer number of markets and concepts that Amazon are looking to enter is endless, and this could well be why they were found guilty of monopolization in October. How is Andy Jassy going to commit to all these plans while handling the monopoly claims? It is a huge problem, one that he will have to handle quickly and effectively. If he is mistaken in his method, however, then Amazon are looking at a puzzling future
