Jeff Bezos to step down as Amazon CEO as sales rocket past US$100 billion

Andy Jassy, Amazon’s current cloud computing chief will replace Jeff Bezos as the next Amazon CEO. Bezos will take up the position of executive chairman.

Tricia Ang | 8 February 2021

Amazon pledges $2 billion fund to invest in clean energy
Photo from NBC News

Amazon on Tuesday February 2, announced that founder Jeff Bezos will step down as chief executive officer (CEO) and take up the position of executive chairman. Amazon reported its third consecutive record profit and quarterly sales above US$100 billion (S$133 billion) for the first time in history.

Andy Jassy, Amazon’s current cloud computing chief will be the next CEO. The transition will be taking place in the third quarter.

Net sales for the company shot up to US$125.56 billion as consumers shopped for the holiday season. According to IBES data from Refinitiv, the net sales beat analysts’ estimates of US$119.7 billion.

Jeff Bezos, who started the company 27 years ago as an Internet bookseller, said in a note to employees posted on Amazon’s website: “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.”

Amazon shares were up less than 1 per cent in after-hours trading.

Mr. Jassy joined Amazon in 1997 and holds an MBA from Harvard Business School according to the company’s website. Amazon Web Services (AWS) was created by Jassy and evolved into a cloud network used by millions of users, the company said.

Mr Tom Johnson, chief transformation officer at Mindshare Worldwide, said Mr Jassy’s promotion underscored the importance of Web services to Amazon’s future.

“Jassy’s background in steering AWS shows just how top of mind those services are to Amazon’s business strategy. It will be interesting to see how that affects their strategy and balancing that priority with a growing ad business and the commerce behemoth,” he said.

Mr. Jassy’s AWS, historically a bright spot, has fallen somewhat shy of hopes. While the cloud computing division reported agreements with ViacomCBS, the BMW Group and others, it generated sales of US$12.7 billion, down from the expected US$12.8 billion analysts.

Amazon stated it was not announcing a replacement for Mr Jassy at this time.

With the outbreak of the coronavirus epidemic in the United States, customers soon converted to Amazon for home goods and medical supplies. Bricks-and-mortar retailers closed their doors; Amazon, the world’s biggest internet retailer, instead employed more than 400,000 people and earned unprecedented profits.

Photo from The Straits Times

Mr Bezos founded Amazon in 1994 and started off as an internet book seller. Amazon went on to grow into a giant that dominates online retail, with operations in streaming music and television, groceries, cloud computing, robotics, artificial intelligence and more.

“This journey began some 27 years ago,” Mr Bezos said in the letter to Amazon employees.

“As much as I still tap dance into the office, I’m excited about this transition,” he wrote.

During the announcement, Mr Bezos said this new position will allow him to oversee Amazon and also devote time to his other businesses, including The Washington Post newspaper and the private space firm Blue Origin.

He also stated to concentrate on his philanthropy efforts. His Day One Fund and the Bezos Earth Fund, to which he made a US$10 billion donation last year.

“I’ve never had more energy, and this isn’t about retiring. I’m super passionate about the impact I think these organisations can have,” he wrote.

This move comes after former wife MacKenzie Scott seized the spotlight in the philanthropic arena as she pledged to give away the majority of her wealth to social causes, starting off with nearly US$6 billion donated last year to a variety of organisations chosen with the help of advisers.