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AMAZON.COM, INC. Founder Jeff Bezos will step down as CEO and become CEO, naming the head of his lucrative cloud computing division as his successor in a sign of the company’s transformation from retail web to internet conglomerate.
This summer, Bezos, 57, will hand over the keys to the world’s largest online retailer to Andy Jassy, head of its Amazon Web Services cloud division known as AWS. Tuesday’s announcement solves a long-standing question about who would replace the world’s second-richest person at the helm of the company.
Bezos is ending his role as CEO on a high note: The business he started as an online bookseller 27 years ago is now one of the world’s most valuable companies, posting three consecutive record profits after losses in previous decades. On Tuesday, Amazon reported quarterly sales in excess of $ 100 billion for the first time.
Mr. Jassy, 53, joined Amazon in 1997 after Harvard Business School, founding AWS and growing it to a cloud platform used by millions of customers, according to the company’s website. He had been a clear contender for the top job since Amazon created two CEO positions that reported to Mr. Years ago Bezos, the other in the hands of recently retired CEO Jeff Wilke.
Tom Johnson, director of transformation at global marketing firm Mindshare, said Mr. Jassy’s promotion underscored the centrality of the web hosting business to Amazon’s strategy.
“Jassy’s experience running AWS shows how important these services are to Amazon’s business strategy. It will be interesting to see how that affects their strategy and balance that priority with a growing ad business and the retail giant, ”he said.
Mr. Jassy is known for understanding highly technical details and has regularly criticized legacy player Oracle Corp and cloud rival Microsoft Corp., which AWS continues to outperform. Mr. Bezos has made fewer public comments about the competition.
Under Jassy’s leadership, Amazon’s cloud business has engaged major clients such as Verizon, McDonald’s, and Honeywell. Silicon Valley startups have long relied on AWS, and the division’s annual revenue grew 37% in 2019 and 30% in 2020, helping solidify its position as a market leader.
One contract AWS did not win was the Pentagon’s $ 10 billion “JEDI” project, which was awarded to Microsoft.
Mr. Jassy has aimed to bring a rock-star aura to keynotes at AWS’s annual conference in Las Vegas, speaking to more than 60,000 attendees in 2019 after upbeat music preceded his talk.
Mr. Bezos, who has already focused on other personal businesses in previous years, said in a note to employees posted on Amazon’s website, “As Exec. Chairman, I will continue to participate in important Amazon initiatives, but I will also have the time and energy I need to focus on the Day 1 Fund, Bezos Earth Fund, Blue Origin, The Washington Post and my other passions. “Blue Origin is the space company by Bezos.
He added, “I’ve never had more energy and it’s not about retiring.”
Chief Financial Officer Brian Olsavsky said in a call with analysts that Bezos would work on “big one-way door issues,” such as acquisitions and other strategies, where there is a high cost to reverse course.
COVIDED EXPENSES
Amazon’s net sales rose to $ 125.6 billion as consumers turned to the world’s largest online retailer for their holiday shopping, beating analyst estimates of $ 119.7 billion, according to IBES data from Refinitiv.
Shares of Amazon rose less than 1% in after-hours trading.
Jass’s AWS, traditionally a bright spot, fell short of expectations in the fourth quarter. While the cloud computing division recently announced deals with ViacomCBS, BMW Group, and others, it posted revenue of $ 12.7 billion, less than the $ 12.8 billion that analysts had estimated.
Amazon said it was not naming an AWS replacement for Jassy at this time.
Meanwhile, Amazon’s e-commerce business has never been bigger. Since the start of the coronavirus outbreak in the US, consumers have turned to Amazon for the delivery of essentials and home medical supplies. While brick and mortar stores closed, Amazon recruited more than 400,000 more workers to meet demand.
That has put the Seattle-based company at the center of the workplace tumult. More than 19,000 have contracted COVID-19 as of September, and some staff members have protested and demanded the facility shut down. Others, at Amazon’s warehouse in Bessemer, Alabama, seek to be the first in the company to unionize in the United States, and elections will begin next week.
Olsavsky told reporters on a conference call that costs associated with the pandemic in the first quarter are expected to add up to $ 2 billion, down from $ 4 billion in the fourth quarter as purchase volumes decline. The company has taken a number of precautions against COVID-19 and written government officials, including US President Joe Biden, say they are eager to offer vaccinations to staff.
An increase in revenue came from moving the Amazon Prime Day marketing event, usually in July, to October, lengthening the holiday shopping season.
Net sales for the current quarter are expected to be between $ 100 billion and $ 106 billion. – Reuters
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