www.amazon.com
founder Jeff Bezos is to step down as CEO and become executive chairman as
the company named the head of its lucrative cloud computing division as
successor.
The move is a sign of the company's transformation from web retailer to
internet conglomerate.
This summer, Bezos, 57, will hand the keys of the world's largest online
retailer to Andy Jassy, head of its cloud division Amazon Web Services known
as AWS.
The announcement settles a long-running question about who would replace the
world's second-richest person at the company's helm.
Bezos is ending his role as CEO on a high note - the business he began as an
internet bookseller 27 years ago is now one of the world's most valuable
companies and it posted three consecutive record profits after losses in
previous decades.
Amazon last night reported quarterly sales above $100 billion for the first
time.
Jassy, 53, joined Amazon in 1997 after Harvard Business School, founding AWS
and growing it to a cloud platform used by millions of customers, the
company's website said.
He had been a clear contender for the top job since Amazon created two CEO
roles reporting to Bezos years ago, the other held by recently retired
consumer CEO Jeff Wilke.
Jassy is known for understanding highly technical details and has regularly
taken jabs at legacy player Oracle and cloud rival Microsoft, which AWS
continues to exceed in sales. Bezos has made fewer public remarks about
competitors.
Under Jassy's leadership, Amazon's cloud business has signed major customers
including Verizon, McDonald's and Honeywell.
Silicon Valley startups have long relied on AWS, and the division's annual
revenue grew 37% in 2019 and 30% in 2020, helping cement its position as the
market leader.
But one contract AWS failed to win was the $10 billion "JEDI" project from
the Pentagon, which was awarded to Microsoft.
Bezos already has focused on other personal enterprises in years past.
He 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."
Blue Origin is Bezos' space company.
"I've never had more energy, and this isn't about retiring," he stated.
Chief Financial Officer Brian Olsavsky said on a call with analysts that
Bezos would work on "large one-way door issues," such as acquisitions and
other strategies where there is a high cost to reversing course.
Amazon's net sales rose to $125.6 billion as consumers turned to the world's
largest online retailer for their Christmas shopping, beating analyst
estimates of $119.7 billion, according to IBES data from Refinitiv.
AWS, traditionally a bright spot, fell slightly short of expectations in the
fourth quarter. While the cloud computing division recently announced deals
with Viacom, the BMW Group and others, it posted revenue of $12.7 billion,
short of the $12.8 billion analysts had estimated.
Meanwhile Amazon's e-commerce business has never been as big. Since the
start of the US coronavirus outbreak, consumers have turned to Amazon for
delivery of home staples and medical supplies.
While brick-and-mortar shops closed their doors, Amazon recruited over
400,000 more workers to keep up with demand.
That has placed the Seattle-based company at the centre of workplace tumult.
More than 19,000 have contracted Covid-19 as of September, and some staff
have protested and demanded facility closures.
Others, at Amazon's Bessemer, Alabama, warehouse, are seeking to be the
first at the company to unionise in the US, with an election to begin next
week.
Olsavsky told reporters on a conference call that costs associated with the
pandemic in the first quarter are expected to total $2 billion, down from $4
billion in the fourth quarter as shopping volumes decrease.
The company has taken an array of Covid-19 precautions and has written to
government officials - including US President Joe Biden - saying it is eager
to offer vaccine shots to staff.
A boost in revenue came from moving Amazon's marketing event Prime Day -
usually in July - to October, lengthening the Christmas shopping season.
The company said that its net sales for the current quarter are expected to
be between $100 billion and $106 billion.
