Jeff Bezos is stepping down as the CEO of Amazon, 27 years after founding it with his ex-wife and building it into one of the most successful companies of all time now worth $1.7 trillion.
Bezos, 57, announced the move in a letter to his 1.3 million Amazon employees Tuesday where he insisted he isn’t retiring but wants to focus on his ‘passions’ including his space and climate change ventures.
He will be replaced by 53-year-old Andy Jassy, the current CEO of the Amazon empire cloud business Amazon Web Services (AWS) and the man behind the move to cancel Parler back in January.
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Amazon founder Jeff Bezos (pictured with his girlfriend Lauren Sanchez) announced on Tuesday he was stepping down as CEO of the company later this year
Bezos (in an undated photo) said he wasn’t retiring but will ‘focus on the Day 1 Fund, the Bezos Earth Fund, Blue Origin, The Washington Post, and my other passions’
Bezos will be replaced by Amazon Web Services CEO, Andy Jassy
Jassy has been with the company for 24 years and built AWS into the $40billion, internet-dominating machine it now is.
AWS dominates a third of the internet’s cloud business – by far the largest. It is how governments, companies and individuals keep data and operate online.
Bezos will move to the role of Executive Chair where he says he wants to focus on ‘new products and initiatives’.
It is not clear who will take over Jassy’s role at AWS and what the future holds for the cloud computing giant.
The move will not happen until the third quarter of this year.
Bezos didn’t explain the timing for the announcement on Tuesday but it comes as he faces increased scrutiny from Washington over Amazon’s business practices.
The retail giant has been plagued by antitrust investigations, calls for stricter sanctions and cutting questions over its treatment of its workforce amid the pandemic.
Bezos himself was hauled before Congress in July to answer to accusations that Amazon, along with other big tech firms, was using their position to crush competition.
JEFF BEZOS FULL EMAIL TO STAFF
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.
As Amazon became large, we decided to use our scale and scope to lead on important social issues. Two high-impact examples: our $15 minimum wage and the Climate Pledge. In both cases, we staked out leadership positions and then asked others to come along with us. In both cases, it’s working. Other large companies are coming our way. I hope you’re proud of that as well.
I find my work meaningful and fun. I get to work with the smartest, most talented, most ingenious teammates. When times have been good, you’ve been humble. When times have been tough, you’ve been strong and supportive, and we’ve made each other laugh. It is a joy to work on this team.
As much as I still tap dance into the office, I’m excited about this transition. Millions of customers depend on us for our services, and more than a million employees depend on us for their livelihoods. 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. 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.
Bezos announced the change in an email to staff on Tuesday afternoon and as the company reported bumper 2020 Q4 earnings of more than $100billion.
Throughout the whole of 2020, Amazon stocks rose by 85 percent.
In the memo, Bezos insisted this ‘isn’t about retiring’ and said he was ‘excited about this transition’.
He described the role he has occupied for almost three decades as ‘consuming’ and said it was ‘hard to put attention on anything else’.
Bezos said he ‘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.’
In the letter Bezos said: ‘Fellow Amazonians, 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,’ he said.
He signed off his email telling staff to ‘keep inventing’ and not be put off if the idea ‘looks crazy’.
Bezos founded Amazon in 1994 on a road trip with his ex-wife MacKenzie. It made him the richest man in the world with a net worth of $188billion.
He and Elon Musk trade the title depending on their respective companies’ success in the markets.
A 1999 60 Minutes interview shows Bezos in an office with a spray-painted amazon.com sign
Amazon’s share price went up by 1.1 percent after the announcement but were not dramatically changed.
Jassy, a married father-of-two and Harvard graduate, was recently hailed by Amazon employees as a decisive ‘shark’.
‘He has a tremendous amount of trust in his team, but you have to be at the highest levels of diligence and preparation for any meeting with him.
‘He’s a shark who will smell a drop of blood from 100 miles away if you’re not ready,’ one employee told Business Insider on January 31 in a profile about how he could become the next CEO.
AWS is one of if not the most promising arm in the company. Since it was formed in 2003, Jassy has helped turn it into a $40bn hosting service for other online businesses.
Analysts were calling Jassy and AWS the future of Amazon before Tuesday’s announcement.
‘AWS and Jassy — they’re the gatekeepers. Jassy’s one of the most powerful leaders not just within the cloud and the tech sector but in the world of business,’ Dan Ives, an analyst at Wedbush Securities, said.
Amazon shares were largely unaffected at the time of the announcement on Tuesday afternoon
Amazon’s share price has grown hugely not only since Bezos and MacKenzie divorced but since the start of the pandemic. The company is worth more than $1.7trillion now
Bezos founded Amazon in 1994 as an online market place for books. He is shown in 1997
Jeff and then-wife MacKenzie Bezos at Allen & Co in 2003
WHAT’S NEXT FOR JEFF BEZOS?
In his memo to staff, Bezos insisted this ‘isn’t about retiring’ saying he ‘will stay engaged in important Amazon initiatives but also have the time and energy’ to focus on ‘new products and initiatives’ in his new role as Executive Chair.
Bezos cited a number of focuses he plans to turn his attention to: the Day 1 Fund, the Bezos Earth Fund, Blue Origin, The Washington Post, and ‘my other passions.’
Blue Origin is Bezos’s space tourism project which he launched back in 2000.
Blue Origin has successfully used a single New Shepard Rocket six times.
The Amazon boss has been going head to head with rival Elon Musk to get his project off the ground ahead of his SpaceX but Blue Origin is yet to announce a date for the first crewed mission.
The Day 1 Fund
Bezos set up his $2 billion philanthropic endeavor the Day 1 Fund with ex-wife MacKenzie back in 2018.
The fund was set up to fund existing non-profits that help families experiencing homelessness, and to create a network of new, non-profit tier-one preschools in low-income communities.
Included in it is the Day 1 Families Fund which gives annual leadership awards to organizations and groups that provide shelter and support to families facing homelessness.
There is also the Day 1 Academies Fund – a ‘network of high-quality, full-scholarship Montessori-inspired preschools in underserved communities’.
The Bezos Earth Fund
The Bezos Earth Fund is the name of the $10 billion venture launched in February 2020 to invest in scientists, activists and other organizations with the aim of tackling climate change.
The Washington Post
Bezos bought the newspaper in 2013 after being approached by the son of the Post’s publisher Katharine Graham.
He helped turn around the struggling business, doubling its web traffic in just three years.
Bezos has since described the move as ‘one of the things I’m most proud of’.
‘When I’m 90, it’s going to be one of the things I’m most proud of, that I took on the Washington Post and helped them through a very rough transition,’ he said in 2018.
- Self-driving cars – In June 2020, Amazon acquired self-driving-taxi company Zoox, making a move into the self-driving car industry.
- Internet satellite programs – Amazon’s Project Kuiper is the plan to launch more than 3,000 internet satellites into low Earth orbit.
Inside the company, he is widely known for ‘the Chop’ – the conference room next to his office and the term for his brainstorming meetings where big ideas and employees get chopped down to size, sources told Insider.
It was his decision to end Amazon’s business with Parler, an unregulated social media site favored by the alt-right that was used, in part, to orchestrate the January 6 Capitol riot.
Amazon has said booting Parler from the web was a ‘last resort’ after the app was ‘unwilling’ to ‘remove content that incites and plans the rape, torture and assassination of named public officials’.
The ban shone a greater spotlight on the ongoing conversation around the power of big tech and led to Parler suing the web host for antitrust violations.
Joining back in 1997 – the same year the company went public – Jassy quickly rose up the ranks at Amazon.
Before taking the helm of AWS, he served as Bezos’ ‘shadow’ advisor and joined in every one of his meetings.
He earned $20million over the last three years, according to Insider.
Bezos founded Amazon as an online bookstore in 1994, before the internet was widely used.
He told his wife about the idea while they were driving from New York City to Seattle. They’d been married for a year and had quit their jobs at law firms.
MacKenzie later recalled in an interview: ‘I’m not a businessperson. So to me, what I’m hearing when he tells me that idea is the passion and the excitement.
‘And to me, you know, watching your spouse, somebody that you love, have an adventure — what is better than that, and being part of that?’
She started working as an accountant and was one of the first Amazon employees.
They started by forming contracts with book stores like Barnes & Noble to sell their books online, then added from there.
Now, it is the single largest online retail marketplace in the world.
Amazon Web Services has emerged as one of biggest profit centers for the ecommerce giant, with the cloud business making up over 60 percent of Amazon’s operating profits and generating over $40 billion in revenue each year.
Prior to Tuesday’s announcement, speculation has been mounting for years that Amazon would spin off AWS into a separate business.
Wall Street investors have for some time believed AWS could do better broken off from Amazon and away from the increased scrutiny around the retail giant’s anti-trust suits.
With Jassy’s promotion, the future of AWS including whether it will be spun off from Amazon and who will now take the helm, isn’t clear.
But was is clear is that Jassy had become hot property in the tech industry in recent years, having previously been rumored to be in the running for the top jobs at both Microsoft and Uber.
Meanwhile, Bezos has hit the headlines of late as both his personal and professional dealings have come under increased scrutiny.
In January 2019, Bezos and MacKenzie announced they were divorcing after 25 years of marriage and four children after the National Enquirer revealed the tech entrepreneur had been having an affair with former news anchor Lauren Sanchez.
Amazon Web Services has emerged as one of biggest profit centers for the ecommerce giant, with the cloud business making up over 60 percent of Amazon’s operating profits and generating over $40 billion in revenue each year
The divorce split the company stocks, and made MacKenzie the richest woman in the world with a settlement of around $38billion.
That nearly doubled throughout the COVID-19 pandemic as Amazon – one of the only retailers that could continue because of its online retail model – thrived.
MacKenzie has put her ex-husband to shame in recent months with her charitable giving.
Just last week she donated $25 million to United Way of Central Indiana – the largest donation ever given to the Indiana-based charity.
MacKenzie announced back in December her plans to donate $4.2 billion to 384 organizations across all 50 states, Puerto Rico and Washington, DC.
Meanwhile, Bezos and his new beau Sanchez were embroiled in a lawsuit with Sanchez’s brother Michael Sanchez over intimate texts and images leaked to the Enquirer.
Michael sued Bezos in February 2019 accusing the 57-year-old and his security consultant, Gavin de Becker, of damaging his reputation by telling journalists that it was he who had leaked the naked photos of Bezos to the outlet.
In November Judge John P. Doyle of the Los Angeles County Superior Court dismissed the case, saying Sanchez’s allegations were relying heavily on hearsay.
In July, Bezos testified at Congress about Amazon’s practices, along with other CEOs, and insisted that Amazon is not anti-competitive despite its market dominance
Bezos is now asking his girlfriend’s brother to pay his $1.7 million legal fees.
Aside from his personal life, Bezos has also been faced with increased scrutiny over his professional life.
Over the last four years, Bezos has, along with the rest of Silicon Valley, faced tougher criticism from governments around the world about monopolizing technology and the way the world depends on it.
In July, he testified at Congress about Amazon’s practices, along with CEOs of Facebook, Apple and Google, and insisted that Amazon is not anti-competitive despite its market dominance.
His appearance came after House lawmakers threatened to subpoena for his testimony after Amazon initially declined to commit his attendance.
Bezos ended up appearing voluntarily and defended the company’s business practices and approach to competition.
Federal Trade Commission officials are also probing the company over its business practices in retail and cloud computing.
Numerous antitrust investigations and suits are still ongoing against the ecommerce giant on both a state and federal level.
Last month, Amazon was slapped with a fresh suit accusing the retail giant of fixing the price of e-books sold on its marketplace by making anticompetitive agreements with the ‘Big Five’ publishers.
The suit, filed in the US District Court of the Southern District of New York, claims Amazon entered into fix pricing agreements with Hachette, HarperCollins, Macmillan, Penguin-Random House and Simon & Schuster.
While share prices skyrocketed amid the pandemic as stay-at-home orders sent consumers to order online, the retailer faced its biggest labor unrest in its history (a walkout at an Amazon plant in NYC in March)
This enabled the publishers to increase prices by up to 30 percent and for Amazon to remain protected from price competition from rivals, the suit claims.
The same month, Connecticut Attorney General William Tong also said his office had an ‘active and ongoing antitrust investigation’ into Amazon over e-book price agreements with publishers.
Amazon has also come under fire over its treatment of its workers, particularly the staff working on the frontline of the pandemic in the fulfilment centers.
While share prices skyrocketed amid the pandemic as stay-at-home orders sent consumers to order online, the retailer faced its biggest labor unrest in its history.
Hundreds of Amazon workers staged mass call outs in March and April claiming the company had placed warehouse staff at ‘increased risk and exposure’ to coronavirus.
It also emerged in March that Bezos – along with other top executives – had offloaded shares just in time before the pandemic slashed their company values, saving themselves billions while workers across the US find themselves on the breadline.
Bezos was the biggest seller, offloading $3.4 billion in shares in the first week of February, saving him a staggering $317 million than if he had kept the stock through to March 20.
It also saw the billionaire sell as much stock in that one week as he did in the whole of the prior year.
Then there’s been mounting calls for Amazon to pay a larger tax share.
It is not clear what impact the Biden administration will have on Amazon but Biden vowed on the campaign trail to reform labor laws and expand worker protections.