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Jeff Bezos to step down as CEO of Amazon

REUTERS

WASHINGTON: Amazon.com Inc on Tuesday said founder Jeff Bezos would step down as CEO and become executive chairman, as the company reported its third consecutive record profit and quarterly sales above $100 billion for the first time.

The transition, slated for the third quarter, will make current cloud computing chief Andy Jassy Amazon's next chief executive officer.

Net sales rose to $125.56 billion as consumers turned to the world's largest online retailer for holiday shopping, beating analyst estimates of $119.7 billion, according to IBES data from Refinitiv.

Bezos, who started the company 27 years ago as an internet bookseller, said in a note to employees posted on Amazon's website, "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’m super passionate about the impact I think these organizations can have,” he wrote in his note to employees.

He added, "I’ve never had more energy, and this isn’t about retiring."

Jassy joined Amazon in 1997 and has a MBA from Harvard Business School, according to the company's website. He founded Amazon Web Services (AWS) and grew it to a cloud platform used by millions, the company said.

Tom Johnson, chief transformation officer at Mindshare Worldwide, said Jassy's promotion underscored the importance of web services to Amazon's future.

"Jassy’s background in steering AWS shows just how top of mind those services are to Amazon's business strategy. It’ll be interesting to see how that affects their strategy and balancing that priority with a growing ad business and the commerce behemoth," he said

Since the start of the U.S. coronavirus outbreak, consumers have turned increasingly to Amazon for delivery of home staples and medical supplies. Brick-and-mortar shops closed their doors; Amazon, the world's largest online retailer, instead recruited over 400,000 more workers and posted consecutive record profits.

Bezos steps away from Amazon at a time when its market value hovers around $1.7 trillion, making it one of the most valuable companies in the world.

It remains to be seen how active Bezos will be in Amazon’s business in his new role. Several major tech executives have stepped down as CEO and remained intimately involved in their companies’ business, including Larry Ellison at Oracle and Bill Gates at Microsoft. Bezos remains one of Amazon's biggest shareholders.

"I will reiterate [Jeff Bezos] is not leaving," Brian Olsavsky, chief financial officer of Amazon, told investors on Tuesday. "He's going to be executive chairman, super important role, super active in the Amazon success story."

The move is a major turning point in one of the most successful entrepreneurial runs in American history. Bezos founded Amazon in 1994 as an online bookstore, survived the dot-com bubble in the early 2000s, and built the company into one of the largest employers in the U.S. with a network of facilities touching almost every part of the country. Bezos is one of the world's richest people, having recently been edged out of the top spot by Tesla CEO Elon Musk.

"The question I was asked most frequently at that time was, 'What’s the internet?,'" Bezos said in the employee memo about the early days of Amazon. "Blessedly, I haven’t had to explain that in a long while."

In addition to dedicating time to his space exploration company Blue Origin and to The Washington Post, which he owns, Bezos said he plans to focus on his philanthropic efforts including the Day 1 Fund and the Bezos Earth Fund, which are focused on helping homeless families and starting preschools in low-income communities and climate change, respectively.

In an interview with NBC News this week, outgoing Washington Post executive editor Marty Baron commended Bezos for his ownership of the paper.

“It's not just money, it's not financial capital,” Baron said. "It's intellectual capital. He’s someone who understands consumer business and consumer behavior. That is really important to us."

Bezos has faced some accusations that he has been slow to share his fortune. His former wife, MacKenzie Scott, the philanthropist and author who divorced Bezos in 2019, has given away more than $6 billion in the past year. As part of the divorce, Scott received a 4 percent stake in Amazon.

Bezos' move sparked reaction from many of his fellow tech chiefs, including Google CEO Sundar Pichai.

"Congrats @JeffBezos, best wishes for Day 1 and Earth fund," Pichai tweeted.

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