Even after resigning as CEO, Amazon founder Jeff Bezos seems to continue to identify new frontiers for the world’s leading e-commerce company. Meanwhile, his successor is working on increasing efforts to reduce his power.
Tuesday’s announcement that Bezos will step down as CEO this summer came as a surprise. But that doesn’t mean Amazon is losing its vision, which turned an online bookstore founded in 1995 into a $ 1.7 trillion giant that sometimes seems to do little of everything.
Bezos, 57, never let Amazon rest on its laurels. Only in the last year, he bought a company that develops autonomous taxis; launched an online pharmacy that sells inhalers and insulin; and obtained government approval to launch more than 3,200 satellites to transmit Internet service to Earth.
Andy Jassy, a longtime executive at Amazon, will be the new CEO, but Bezos will be the company’s chief executive – speaking for board leaders who, unlike most, remain involved in key operational decisions. Think of Robert Iger at Disney, Howard Schultz at Starbucks or Eric Schmidt at Google after teaching the reins a decade ago.
“Jeff Bezos has had firm control over the company for a long time,” said Ken Perkins, president of RetailMetrics LLC, a retail research firm. “I have to believe that he will have a say in what is happening and will have a big hand in overall decisions.”
Amazon’s chief financial officer Brian Olsavsky made the move sound like a mere mixture of chairs. “It’s more of a restructuring of who does what,” he said during a call Tuesday with reporters.
Investors did not post bail after hearing about the upcoming change in Amazon’s order and instead focused on the company’s blockbuster earnings, which it also announced on Tuesday. Amazon shares rose slightly in extended trading on Tuesday – not something that tends to happen when Wall Street is worried about a shake-up in management.
“I don’t think it will be complete,” CFRA analyst Tuna Amobi said of Bezos.
In a blog postBezos said the CEO kept him away from exploring new ideas and initiatives that could provide growth opportunities. He now plans to focus more on such an innovation, along with other companies such as his rocket company Blue Origin and his newspaper, The Washington Post.
“Being the CEO of Amazon is a profound and consuming responsibility,” Bezos wrote. “When you have such a responsibility, it’s hard to draw attention to anything else.”
The change will confront Jassy with some of the responsibilities that Bezos clearly did not enjoy. Perhaps most discouraging is the growing scrutiny of Amazon’s influence in an online shopping market, which became even more essential for consumers during last year’s pandemic.
The US government has already hit two other technology centers, Google and Facebook, with antitrust lawsuits. Both regulators and lawmakers have left no doubt that they are carefully considering whether similar actions are warranted against Amazon and Apple.
Jassy will probably have to remove the antitrust threat while trying to forge his own legacy. A revered founder of a company can cast a long shadow.
“Amazon’s size makes some industries uncomfortable, some governments uncomfortable, and Andy Jassy will have to deal with the consequences,” said Gartner analyst Ed Anderson. “This will be part of the new era of his leadership.”
Jassy could also face pressure from critics who believe Amazon’s success was built in part by mistreating many of its 1.3 million employees, especially those in distribution depots and delivery trucks, who they are paid much less than technological engineers, while also facing more dangerous conditions.
“Jeff Bezos’ departure as CEO is a chance for Amazon to hand over a new leaf,” said Robert Weissman, president of Public Citizen, an activist group in Washington. “It should start by paying all employees a salary and ensuring that they have safe and healthy working conditions.”
Analysts said Bezos appears to have chosen a successor to meet the challenge. Jassy is highly respected for building Amazon’s web services division, which manages many of the world’s largest websites. Earnings from this cloud computing service have also helped subsidize the company’s online shopping operations, as it has reduced prices so low that it has lost money for many years.
“It turned out to be the most profitable part of the company,” Amobi said. “His challenge is to translate this into a 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 of New York, Marcy Gordon in Washington and Matt O’Brien in Providence, Rhode Island, contributed to this story.