Senior cloud executive Andy Jassy will take over as Chief Executive Officer in the Third Quarter of 2021. Bezos will take over as Executive Chairman of Amazon’s board. Jeff Bezos, 57, founded the iconic Amazon in 1994 as an online bookstore, which Bezos has since transformed into one of the world’s largest and biggest mega-retailers dealing with a variety of categories, ranging from gadgets to groceries to streaming. In January of 2020, Amazon surpassed a $1 trillion market cap under Bezos’ leadership. Currently it’s worth more than $1.6 trillion.
There has been over a period of time speculation about the company’s succession plans. Industry observers had speculated that either Andy Jassy himself or Jeff Wilke, who is CEO of Amazon’s worldwide consumer business, would be Bezos’ successor. In August of 2020, Amazon announced Wilke would, however, retire in 2021.
Jassy joined Amazon in 1997 and has for over two decades led Amazon’s Web Services (AWS) cloud team since inception. AWS, a significant powerhouse in the Amazon group, continues to drive the lion’s share of Amazon’s profits.
“I’m excited to announce that this Q3 I’ll transition to Executive Chair of the Amazon Board and Andy Jassy will become CEO,” Bezos announced in a letter to employees. “In the Exec Chair role, I intend to focus my energies and attention on new products and early initiatives. Andy is well known inside the company and has been at Amazon almost as long as I have. He will be an outstanding leader, and he has my full confidence.”
The news of succession was backgrounded by an earnings report where Amazon posted its first $100 billion quarter in its history even as AWS, under Jassy’s leadership, reported a 28% revenue growth for the fourth quarter. Analysts attribute about 52% of Amazon’s operating income to AWS as of October 2020.
In the wake of the succession news and earnings report, Amazon shares of Amazon were up about 1% in extended trading on Tuesday. The company’s stock has so far gained about 4% in 2021 and has been up nearly 70% in the last 12 months.
Meanwhile, Amazon’s Chief Financial Officer, Brian Olsavsky, told media that the C-suite change was decided following consultations with Amazon’s board of directors, adding that Bezos would, however, remain “very involved and have his fingerprints on lots of different parts of the company”. Describing Jassy as a visionary leader, Olsavsky said he would bring to the table his own skills set and that Amazon would expect “a lot of continuity with the transition”.
Jassy will be expected to guide and lead the company through the widespread antitrust concerns once he takes over. In October of 2020, after an investigation into competitive practices at big tech companies including Amazon, that lasted 16 months, the House Judiciary subcommittee on antitrust concluded that Amazon, Apple, Facebook, and Google enjoy monopoly power. Meanwhile, Amazon is also facing antitrust complaints in the European Union.
Rep. Ken Buck, R-Colo., a member of the House Judiciary Committee, said on Twitter shortly after the leadership change announcement that he will have questions for Jassy.
Meanwhile, Bezos said he would “stay engaged in important Amazon projects” but would also have more time to focus on the Bezos Earth Fund, his Blue Origin spaceship company, The Washington Post and the Amazon Day 1 Fund.
“As much as I still tap dance into the office, I’m excited about this transition,” Bezos said in his announcement. “Millions of customers depend on us for our services, and more than a million employees depend on us for their livelihoods. Being the CEO of Amazon is a deep responsibility, and it’s consuming. When you have a responsibility like that, it’s hard to put attention on anything else.”
Industry CEOs and Amazon competitors congratulated Bezos and Jassy on the coming transition, with Microsoft CEO Satya Nadella calling Jassy’s promotion “well-deserved”.