Jeff Bezos has formally stepped down as chief executive of online giant Amazon, with the role of CEO passing on to Andy Jassy, the longstanding head of the group's Amazon Web Services arm as of 5 July. But don't expect the 57-year-old Bezos to sever his links with the empire he created any time soon.
As he outlined in a letter to Amazon staff earlier this year, Bezos, who is transitioning to the position of executive chairman, is to focus his efforts on the philanthropic Day 1 Fund, continue to invest in the Bezos Earth Fund, and revitalise the Washington Post into a powerful online player.
"I’ve never had more energy, and this isn’t about retiring," he said. "I’m super passionate about the impact I think these organisations can have."
In the immediate short-term, of course, Bezos is set to go where few men have gone before, jetting into space on 20 July in his New Shepard space capsule, part of the billionaire's Blue Origin space program.
Andy Jassy's First Challenge
Jassy, Bezos' replacement in the role, has 24 years' worth of experience at Amazon, most notably has the head of Amazon Web Services, or AWS, its most profitable business arm. The 53-year-old has been described as being 'less hot tempered' than Bezos, albeit with the same ambitious streak.
But as Bloomberg reported last week, Jassy comes into the business at a time when Amazon is facing pressure from regulators over the size of its empire – including discussions about a possible break-up of the business – while its share price performance this year is lagging behind many of its peers, most notably Google owner Alphabet Inc, Facebook, and Microsoft, the latter being its core rival in the cloud computing arena.
As Bezos put it back in February, “Amazon is what it is because of invention. We do crazy things together and then make them normal." With that in mind, while his predecessor jets off into space, Jassy will be eager to keep the Amazon ship on the ground for the time being – less of the 'crazy', more of the 'controlled'.
'Personality And Passion'
As retail analyst Neil Saunders of GlobalData recently explained, while many of the traits that have made Amazon the company that it is are due to the "personality and passions" of its founder, the business has now evolved into a multi-pronged operation driven by an array of talented people – facilitating Bezos' departure from the top job.
"Amazon is the product of one man’s vision, but it its scale is the sum of the work of many," he said. "This is one of the reasons why Bezos feels confident in transitioning out of the CEO role and handing over the reins to Mr. Jassy.
"While the new position is big news, the truth is that Mr. Bezos will remain fully involved with the company. Indeed, as part of his new role, Bezos will be able to focus more on new ideas – something in which he excels. He will also still be around to guide the company and ensure that it does not lose its innovative edge."
At the same time, however, Amazon's size means that it is not immune from criticism – far from it – and Bezos is likely to still be involved when it comes to steadying the ship, as Saunders explains.
"Despite Bezos’ and Amazon’s success, with scale comes criticism. Big is often associated with bad because some people assume that growth can only be obtained by dishonest means or by treading on others," he said. "In our view these barbs are misdirected. Amazon is big simply because it has given customers what they want. To grow it had to take share from other giants of retail, some of which were once seen as unassailable."
As Russ Mould of AJ Bell explained, as executive chairman, Bezos role will likely involve "keeping the chief executive in order", meaning he will still be well ingrained in the business.
“Bezos is changing roles at an interesting time for Amazon," he said. "On one hand, the business is firing on nearly all cylinders, with the retail and web server businesses thriving and groceries arguably still trying to find its way.
"Yet cloud computing is becoming increasingly competitive and Amazon is among a group of giant tech companies under the spotlight of regulators and politicians who have concerns about them wielding too much power."
Amazon has certainly reaped the benefits of coronavirus-imposed lockdowns – in full-year 2020, net sales were up 38%, impressive numbers by any stretch of the imagination.
This is unlikely to come to a halt anytime soon, with the business continuing to roll-out consumer-focused innovations, according to Katie Cousins of Shore Capital.
"Given the ongoing pandemic and national lockdown restrictions temporarily removing physical retail options, we would expect Amazon, as a global online eCommerce player, to continue to enjoy the increasing demand," she said.
"The recent venture into online prescription medicines, Amazon Pharmacy, appears a timely solution and we would expect the grocery development to continue to be a disruptive competitor against traditional retailers. The past 12 months have presented the group a unique opportunity to acquire new customers not only onto the shopping platform but subscribed into the Prime offering." [Image: ©leirbagarc/123RF.COM]