Amazon’s Jeff Bezos to step down as CEO this summer

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Amazon Founder and CEO Jeff Bezos.
Amazon Founder and CEO Jeff Bezos.

Amazon founder Jeff Bezos has announced that he will be stepping down as CEO of the Seattle-based eCommerce giant this summer.

Bezos originally founded the firm in his garage nearly 30 years ago, originally as an online bookstore, and has been the driving force behind the company’s incredible growth – which saw him become the world’s richest man.

He will be replaced by Andy Jassy, the current Chief Executive of Amazon’s hugely profitable cloud computing division. However, Bezos will remain a part of the company, but will focus on new innovations.

In a letter to Amazon staff on Tuesday last night, Bezos said: “I’m excited to announce that this Q3 I’ll transition to Executive Chair of the Amazon Board and Andy Jassy will become CEO. In the Exec Chair role, I intend to focus my energies and attention on new products and early initiatives. Andy is well known inside the company and has been at Amazon almost as long as I have. He will be an outstanding leader, and he has my full confidence.

“This journey began some 27 years ago. Amazon was only an idea, and it had no name. The question I was asked most frequently at that time was, “What’s the internet?” Blessedly, I haven’t had to explain that in a long while.

“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.

“How did that happen? Invention. Invention is the root of our success. We’ve done crazy things together, and then made them normal. We pioneered customer reviews, 1-Click, personalized recommendations, Prime’s insanely-fast shipping, Just Walk Out shopping, the Climate Pledge, Kindle, Alexa, marketplace, infrastructure cloud computing, Career Choice, and much more. If you get it right, a few years after a surprising invention, the new thing has become normal. People yawn. And that yawn is the greatest compliment an inventor can receive.

“I don’t know of another company with an invention track record as good as Amazon’s, and I believe we are at our most inventive right now. I hope you are as proud of our inventiveness as I am. I think you should be.”

Recently, Business Leader spoke with leading academics and business figures to look at what the future will hold for Amazon and what sectors it may push into next.

When discussing his new role, Bezos said: “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.

“Amazon couldn’t be better positioned for the future. We are firing on all cylinders, just as the world needs us to. We have things in the pipeline that will continue to astonish. We serve individuals and enterprises, and we’ve pioneered two complete industries and a whole new class of devices. We are leaders in areas as varied as machine learning and logistics, and if an Amazonian’s idea requires yet another new institutional skill, we’re flexible enough and patient enough to learn it.

“Keep inventing, and don’t despair when at first the idea looks crazy. Remember to wander. Let curiosity be your compass. It remains Day 1.”

Amazon reported £283bn in sales in 2020, up 38% from 2019 – and profits almost doubled, rising to £15.6bn.

Industry reaction

Christian Stadler, Professor of Strategic Management at Warwick Business School, said: “Jeff Bezos stepping down as CEO of Amazon is a landmark moment, but the change probably won’t be as dramatic as it seems. After all, Amazon has a pretty active board and he continue to play a key role in those meetings as chair of the company.

“That said, it is always a key moment when a founder steps back and choosing the right successor is crucial. When Steve Ballmer replaced Bill Gates at Microsoft the company’s growth stagnated and there is a risk that the new CEO will focus more on costs than on innovation.

“Google shows that if you can get the balance right, you can continue to enjoy great success after founders such as Larry Page and Sergey Brin step aside. Amazon is a highly professional firm and Andy Jassy has been with there since the early days, so he understands what makes the company so successful. He is being promoted from the cloud computing business, which suggests he has been chosen because he will continue to drive the business forwards and explore new opportunities.

“I would expect Amazon to continue to grow, rather than running into problems as a result of this.”

Dr Zahira Jaser, Lecturer in Organisational Behaviour and Human Resource Management at the University of Sussex Business School, said: “Jeff Bezos’ move towards philanthropy is unsurprising. Since Warren Buffet pledge in 2006, which saw Bill and Melinda Gates following suit, it seems that the trend for mega rich CEOs is to turn their attention to socially responsible activities. So moving towards philanthropy reflects a traditional trajectory.

“What does this mean for Amazon? As Bezos steps up to dedicate more time to philanthropic activities, this might create an even steeper dissonance between what he preaches in his new socially responsible role, and what Amazon does. Amazon own corporate social responsibility has been under attack because of the poor, sometimes inhuman treatment of their employees in warehouses and packaging facilities.

“So Bezos dedication to philanthropy might on one side push Bezos to influence positively Amazon’s CSR agenda. On the other hand, Bezos might instead heighten the contradiction, and consider his philanthropic good deeds as compensating for the harsh environment at Amazon, and therefore potentially ignore it.

“I do not see any challenge in the continued success of Amazon, we have seen transitions from mega groups before. Amazon advantage is in its utter market domination. They have a robust management structure, so a transition to a new CEO does not represent a huge risk. It is possibly going to be phased and Bezos will retain his attention on the company management for at least the short-term.”

Andrew Missingham, co-founder of B+A, a creative management consultancies, who count Nike, Microsoft and Kellogg’s amongst their client’s comments on Jeff Bezos stepping down from Amazon: “In his note to his “fellow Amazonians”, announcing his resignation from the CEOship of the company he founded (and is re-assignation as Exec Chair), Jeff Bezos wrote: “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.”

“Bezos has already announced that he intends to spend more time on his Day 1 Fund, the Bezos Earth Fund, Blue Origin and other interests. And this is all good news. These are great, lofty, needed projects, that, if they succeed, could benefit the world for many coming generations. But, compared to what he has available, the investment in these projects is mere pocket change.

“With a bit ambition allied to his now-free hours, Bezos has the opportunity to really achieve something. So, here’s a thought experiment he might take time to consider, to extend himself further, using (in his words) “curiosity as his compass”:

“2020 was as bumper a year for Amazon as it was bumpy for the rest of us. This puts Bezos’ current estimated net worth at around $186 billion. That’s more or less a dollar a second, every second from around the estimated biblical date of Adam and Eve’s time in the Garden of Eden (3760 BC) to today.

“In the time since then, many kingdoms and epochs have risen and fallen. The Egyptians, Ancient Greeks and Romans.  The Assyrian empire, the Qing Dynasty, the Zulu Nation, Habsburgs, Ottomans and the British Empire. At a dollar a second, Bezos wealth outlasts them all.

“So, with more time on his hands, maybe he should ask himself – compared to his historical dynastic forebears, what positive impact and legacy could he leave if he tried harder, by reserving 500 years of dollar-per-second income to his business (after all, we wouldn’t want to kill it), and used the rest – over five millennia worth – for the good of the world we all live in?”

Zain Ali, CEO of Centuro Global, said: “From starting as an online bookstore to becoming the world’s most valuable company, Jeff Bezos’ reign as founder and CEO of Amazon has been an overwhelming success.

“Whilst there are a number of question marks surrounding ethics relating to anti-trust and worker conditions, which should not be ignored, the most remarkable features of Amazon have to be its innovation.

“Under Bezos’ management, Amazon has always been one step ahead, pioneering online retail when people did not know what the internet was, building up mass revenues from behind the scenes with cloud computing, and now dominating the AI smart device market with Alexa.

“The way Amazon has also tackled international expansion and adapted to local markets such as offering in store credits for the unbanked to deposit cash in developing regions has always been striking. Bezos’ grit for problem solving and focusing on the end consumer is a big contributor to the company’s success.

“The fact that Bezos is stepping down to focus on new ventures may actually mean there is even more innovation to come from Amazon, with time potentially freed up for more creative thinking. Having slogged for almost three decades, and achieved sales exceeding $386 billion in 2020, now is as good a time as any to take a step back, enjoy the success and focus on other passions.  It will be interesting to see how Bezos manages to transition from out of a role of absolute control and power after so many years and how his successor will fare.”

David Bicknell, Principal Analyst in the Thematic Team at GlobalData offers his view: “Amazon’s decision to hand Andy Jassy, head of the Amazon Web Services’ (AWS) cloud computing business, the job of replacing Jeff Bezos as Amazon’s chief executive completes Amazon’s shift from being a retailer to a technology company.

“AWS is pivotal to Amazon’s business. It accounts for a massive 52% of Amazon’s quarterly operating profit, but only 12% of total sales. It will continue to be the engine of Amazon’s growth and its most important unit for years to come.

“Technology is at the heart of Amazon’s operations, and its success is driven by its strength in the key themes disrupting the tech, media, and telecoms (TMT) sectors, including cloud, artificial intelligence (AI) and the future of work.

“In GlobalData’s sector scorecards, Amazon scores five out of five for the cloud, AI, and future of work themes, indicating that the company’s positioning in these themes will significantly improve its future performance. Amazon is also ranked number one in GlobalData’s application software and IT infrastructure sector scorecards – second behind only Microsoft in cloud services and Apple in consumer electronics.”

Dr Gordon Fletcher, expert in retail and online at the University of Salford Business School, said: “With Jeff Bezos stepping down from Amazon as its CEO it’s a good time to look back on his career. It has been such an extraordinary journey that even Hollywood has so far not touched it.

“The arc from 1994 as a former hedge fund manager to ecommerce founder onwards to one of the richest people in the world seemed unlikely throughout the 1990s as Amazon struggled to show a profit while it was undercutting the mark-ups of traditional booksellers.

“After a very public divorce, a space race with Elon Musk and an increasing interest in charitable giving – with $10 billion given in 2020 – the interests of Amazon and Bezos have increasingly been diverging. For Bezos this is a new chapter in his life. For Amazon, this could be the beginning of an existential crisis as the fallout of the founder effect is felt.

“While there is little doubt that the current head of Amazon Web Services (AWS), Andy Jassy, is able to take over, he is not Bezos. Their backgrounds do overlap. They have management backgrounds and have worked together since 2003 on the development of AWS. The connections are significant. As Amazon pivots increasingly to becoming a platform and web services company in a crowded and competitive market, the question is whether the company needs the continuity of the Bezos legacy or a more radical shift from its original inspiration as an online bookstore.”

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