Jeff Bezos to resign as chief executive of Amazon
Bezos, who founded the
company in 1994, will step down after company recorded $100bn in sales for last
three months of 2020
Jeff Bezos, the billionaire founder of Amazon, will step down as
chief executive, the company announced on Tuesday.
Bezos, who will remain the executive chair will hand the reins to Andy Jassy, chief executive of Amazon Web Services,
the company’s fast-growing cloud computing business.
The surprise news came as Amazon released its latest financial
results. Few companies have thrived like Amazon during the coronavirus
pandemic, and in the last three months of the year, the company recorded sales
of more than $100bn for the first time.
Bezos, 57, founded Amazon in 1994 and built it into one of the
largest companies in the world, amassing a fortune of $185bn. Amazon, which
started as an online bookseller, is now a dominant force in cloud computing,
groceries, electronics, and entertainment, and employs more than 1.1 million
people.
“Amazon is what it is because of invention,” said Bezos. “If you
do it right, a few years after a surprising invention, the new thing has become
normal. People yawn. That yawn is the greatest compliment an inventor can
receive. When you look at our financial results, what you’re actually seeing
are the long-run cumulative results of invention.
“Right now, I see Amazon
at its most inventive ever, making it an optimal time for this transition.”
Bezos has stepped back from the day-to-day running of Amazon in
recent years to pay more attention to his other interests, including space
exploration and his ownership of the Washington Post. But his departure as
chief executive was unexpected.
Jassy, 52, has long been seen as Bezos’s heir apparent, vying
with Jeff Wilke, who ran Amazon’s retail business until he announced plans to
retire last year.
Amazon Web Services (AWS) – which provides cloud computing and
storage for governments and companies including McDonald’s and Netflix – has
become one of the company’s most important businesses, accounting for 10% of
sales in the last quarter and 52% of the company’s profits.
The company had a “record-breaking holiday season” last year,
Amazon said, reporting sales of $125.56bn, its largest quarter of all time.
The leadership change comes at a strange time for Amazon. While
profits continue to surge, it faces pressure from workers who have complained
of mistreatment during the pandemic, and increasing political scrutiny of the
size and power of its business – not least at AWS.
Last month, AWS declined
to host Parler, a would-be Twitter rival popular with Donald Trump supporters,
which became a communication hub for the rioters who stormed the US Capitol.
These companies, as they exist
today, have monopoly power. All need to be properly regulated
David Cicilline
Last year, the US
Congress grilled Bezos
and other top tech executives over the size of their
businesses.
“These companies, as they exist today, have monopoly power,”
said David Cicilline, chair of the House judiciary committee’s antitrust
subcommittee. “Some need to be broken up, all need to be properly regulated and
held accountable. This must end.”
Tim Hubbard, assistant professor of management at the University
of Notre Dame’s Mendoza College of Business, said: “Andy Jassy stepping into
the CEO role at Amazon is a natural fit. Amazon Web Services is a powerhouse
within the company, driving a lot of profitability.
“This transition may free up Bezos to focus on other ideas that
he’s been accumulating over the years. In one way, I think it might be freeing
for him to have space to personally innovate again, without having to
manage the rest of the company.”
Hubbard added: “Given the recent successes at Amazon, especially
during the pandemic, it’s going to be hard to disrupt their momentum.”
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