Even after retiring as CEO, Amazon founder Jeff Bezos seems likely to continue identifying new frontiers for the world’s dominant ecommerce company. His successor, meanwhile, faces escalating attempts to curtail his power.
Tuesday’s announcement that Bezos will hand over the CEO job this summer came as a surprise. But it doesn’t mean Amazon is losing the visionary who turned an online bookstore founded in 1995 into a $ 1.7 trillion colossus that sometimes seems to do a little bit of everything.
Bezos, 57, has never let Amazon rest on its laurels. In the past year alone, it bought a company that develops self-driving taxis; launched an online pharmacy that sells inhalers and insulin; and won government approval to place more than 3,200 satellites in space to send Internet services to Earth.
Andy Jassy, who has been an Amazon executive for many years, becomes the new CEO, but Bezos becomes the company’s executive chairman – corporate talk for board leaders who, unlike most, remain involved in major operational decisions. Think Robert Iger at Disney, Howard Schultz at Starbucks or Eric Schmidt at Google after handing over the reins a decade ago.
“Jeff Bezos has held the company firmly for quite some time,” said Ken Perkins, president of RetailMetrics LLC, a retail research firm. “I have to believe he will have a say in what is going on and play a big role in decisions about the big picture.”
Brian Olsavsky, Amazon’s chief financial officer, made the move sound like just a shift of seats. “It’s more of a restructuring of who does what,” he said during a Tuesday interview with reporters.
Investors didn’t quit after hearing of Amazon’s forthcoming change to Amazon’s injunction, instead focusing on the company’s blockbuster earnings, which it also announced Tuesday. Amazon’s stock is up slightly during Tuesday’s extended trading – not something that tends to happen when Wall Street is concerned about a management shake-up.
“I don’t think he will get rid of it completely,” CFRA analyst Tuna Amobi said of Bezos.
In a blog post, Bezos said the CEO’s job had drawn him away from exploring new ideas and initiatives that could bring growth opportunities. He now plans to focus more on such innovation, along with other ventures such as his rocket company Blue Origin and his newspaper, The Washington Post.
“Being the CEO of Amazon is a deep responsibility, and it takes a lot,” Bezos wrote. “When you have that kind of responsibility, it’s hard to draw attention to anything else.”
The shift will saddle Jassy with some of the responsibilities that Bezos clearly disliked. Perhaps most discouraging is the growing scrutiny of Amazon’s influence on an online retail market that has become even more important to consumers during last year’s pandemic.
The US government has already beaten two other tech powers, Google and Facebook, with antitrust cases. Regulators and lawmakers alike left no doubt that they are thoroughly investigating whether similar measures are justified against Amazon and Apple.
Jassy will likely have to fend off the antitrust threat while trying to forge his own legacy. A well-respected company founder can cast a long shadow.
“Amazon’s size is making some industries uncomfortable, some governments uncomfortable, and Andy Jassy will have to deal with the consequences,” said Gartner analyst Ed Anderson. “That will be part of the new era of his leadership.”
Jassy may also come under pressure from critics who believe Amazon’s success is due in part to the mistreatment of many of its 1.3 million employees, especially those in the distribution warehouses and vans who are paid far less than the technical engineers, while also dealing with more dangerous conditions.
“Jeff Bezos’ departure as CEO is an opportunity for Amazon to turn over a new magazine,” said Robert Weissman, president of Public Citizen, an activist group in Washington. “It must start by paying all of its employees a living wage and ensuring they have safe and healthy working conditions.”
Analysts said Bezos appears to have chosen a successor to take up the challenge. Jassy is well respected for building Amazon’s web services division, which operates many of the world’s largest websites. The revenues from that cloud computing service also helped subsidize the company’s online shopping business as prices got so low it lost money for years.
“He has proven himself in building the most profitable part of the business,” said Amobi. “His challenge is to translate that to the broader e-commerce platform.”
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Pisani reported from New York and Liedtke reported from San Ramon, California. Associated Press writers Mae Anderson and Anne D’Innocenzio in New York, Marcy Gordon in Washington, and Matt O’Brien in Providence, Rhode Island contributed to this story.