Even after stepping down as CEO, Amazon founder Jeff Bezos seems likely to continue to identify new frontiers for the world’s dominant e-commerce company. Meanwhile, his successor manages to cope with the intensification of efforts to reduce his power.
Tuesday’s announcement that Bezos will step down as CEO this summer was a surprise. But that doesn’t mean Amazon is losing the visionary who turned an online bookstore founded in 1995 into a $ 1.7 trillion giant that sometimes seems to do a little bit of everything.
Bezos, 57, has never let Amazon rest on its laurels. Only during the last year did he buy a company that developed autonomous taxis; launched an online pharmacy that sold inhalers and insulin; and obtained government approval to put more than 3,200 satellites into space to transmit Internet service to Earth.
Amazon’s longtime executive Andy Jassy will be the new CEO, but Bezos will be the company’s chief executive, who leads the board leaders who, unlike most, remain involved in key 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 maintains a firm grip on 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 his opinion on what is going on and that he will play a big role in the overall decisions.”
Amazon chief financial officer Brian Olsavsky sounded like a simple shuffle of chairs. “It’s more of a restructuring of who does what,” he said during a Tuesday call to reporters.
Investors didn’t pay any bail after hearing of Amazon’s upcoming change of command and focused on the company’s box office gains, which it also announced Tuesday. Amazon shares rose slightly during Tuesday’s extended operations, something that doesn’t usually happen when Wall Street is worried about a management revolution.
“I don’t think it’s completely there,” CFRA analyst Tuna Amobi said of Bezos.
In a blog post, Bezos said the CEO’s job had sidelined him from exploring new ideas and initiatives that could generate growth opportunities. He now intends to focus more on this 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 deep responsibility and consuming,” Bezos wrote. “When you have a responsibility like that, it’s hard to pay attention to anything else.”
The change will settle 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 that has become even more essential for consumers during last year’s pandemic.
The U.S. government has already hit two other technology centers, Google and Facebook, with antitrust lawsuits. Both regulators and lawmakers have left little doubt that they are looking hard to justify a similar action against Amazon and Apple.
Jassy will probably have to avoid the antitrust threat while trying to forge her own legacy. A revered business founder can cast a long shadow.
“The size of Amazon makes some industries uncomfortable, some governments uncomfortable, and Andy Jassy will have to deal with the consequences,” Gartner analyst Ed Anderson said. “This will be a part of the new era of his leadership.”
Jassy may also face pressure from critics who believe Amazon’s success has been achieved in part by mistreating many of its 1.3 million employees, especially those in distribution warehouses and delivery trucks. who pay much less than technical engineers, although they also face more dangerous conditions.
“The departure of Jeff Bezos as CEO is an opportunity for Amazon to deliver a new leaf,” said Robert Weissman, president of Public Citizen, an activist group in Washington. “It should start by paying all its workers a living wage and ensuring that they have safe and healthy working conditions.”
Analysts said Bezos appears to have chosen a successor who is ready for the challenge. Jassy is highly respected for the creation of Amazon’s web services division, which manages many of the world’s largest websites. The profits from this cloud computing service also helped subsidize the company’s online shopping operations as it reduced prices so low that it lost money for many years.
“It has been proven to build the most profitable part of the business,” Amobi said. “Their challenge is to translate it into the broader e-commerce platform.”
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Pisani reported from New York and Liedtke 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.