In the nearly 27 years since Jeff Bezos founded Amazon in the garage of his Clyde Hill home, he has transformed the business from an upstart online bookseller into a marketplace so expansive — and domineering — that adherents and critics alike call it the “everything store.”
Now, Bezos is preparing to take a step back from the company that has grown synonymous with his name, Amazon announced Tuesday in a news release reporting fourth-quarter earnings results.
By October, Bezos will step down as CEO, to be replaced by deputy Andy Jassy, 53, who leads Amazon Web Services (AWS), the company’s cloud-computing unit. Bezos, 57, will transition to the role of executive chair of Amazon’s board of directors.
Bezos had distanced himself from much of Amazon’s day-to-day business in recent years. But he stepped back into the fray during the pandemic, during which Amazon recorded its most profitable year ever. In 2020, sales surged 38% to $386.1 billion from a year earlier, while profit roughly doubled to $21.3 billion, or $41.83 per share.
Amazon’s financial results “are the long-run cumulative results of invention,” Bezos said in a statement. “Right now I see Amazon at its most inventive ever, making it an optimal time for this transition.”
In an email to Amazon employees, Bezos said he intended to focus on new products and early initiatives, as well as “other passions” that include philanthropic giving through the Day 1 Fund and the Bezos Earth Fund; Blue Origin, his secretive space venture; and The Washington Post.
“As much as I still tap dance into the office, I’m excited about this transition,” he wrote. “I’ve never had more energy, and this isn’t about retiring.”
As chair of the board, Bezos will remain “very involved” on new product development and in setting Amazon’s strategic direction, said Amazon Chief Financial Officer Brian Olsavsky in a call with reporters. “Jeff is really not going anywhere.”
Other influential technology leaders, including Bezos’ Medina neighbor Bill Gates, the co-founder of Microsoft, have also retreated to the board of the directors as they sought to distance themselves from the daily minutiae of the companies they founded. Gates stepped away as Microsoft CEO in 2008 to focus more on his charity, the Bill & Melinda Gates Foundation, and left Microsoft’s board of directors last year.
Bezos founded Amazon in 1994 as an online bookstore and turned it into a retail and technology giant. The innovations he ushered into consumers’ lives — one-click ordering, a seemingly all-encompassing selection of products and delivery so fast that in some places, shoppers can receive goods the same day they order them — have become part and parcel of what consumers expect from online shopping and have sparked numerous challenges from competitors.
Along the way, Bezos became one of the world’s wealthiest people. Bezos’ net worth is estimated at roughly $196 billion, according to Bloomberg’s Billionaires Index, second only to the wealth of Tesla founder Elon Musk. With 10.6% of Amazon’s outstanding shares, Bezos is the company’s largest shareholder.
Bezos, a charismatic leader with a penchant for precision, would always have been difficult to replace, said Matt McIlwain, the managing director of Seattle’s Madrona Venture Group, an early Amazon investor.
“I’ve long felt that if the day came [for Bezos to step down], to have a founder who’s built such an amazing business, it’s really hard for the next CEO to be from outside the company,” McIlwain said. Jassy, he said, “is definitely a great culture keeper of Amazon. He understands the customer-first mentality, he gets small teams to try things, to learn, to iterate.”
Bezos set up the transition to Jassy last summer, when Amazon announced that a likely successor, Jeff Wilke, would soon retire, paving the way for Jassy to take the CEO job. Unlike Wilke, who led Amazon’s retail division, Jassy is a relative outsider to Amazon’s core business, which accounted for nearly $100 billion in sales last quarter. By contrast, AWS revenue was $12.7 billion last quarter, though the division made up roughly half of Amazon’s $6.9 billion in earnings.
“What’s going to be hard for Andy will be to step away some from the Amazon cloud business and step into this much broader role,” McIlwain said, “and learn some of these other businesses that he’s not nearly as deep in.”
Jassy’s Amazon career is defined by his leading Amazon into cloud computing, a business the company has come to dominate just as aggressively as it leads in e-commerce. An Amazon lifer, Jassy joined the company in 1997 after graduating from Harvard Business School. Jassy bears the notorious distinction of accidentally hitting Bezos in the head with a kayak paddle during Amazon’s inaugural game of broomball, now a semiofficial company sport.
Jassy was marked for a leadership role nearly from the beginning of his time at Amazon. In the company’s early years, Jassy shadowed Bezos as the CEO’s technical assistant, a role comparable to chief of staff.
In his 24 years in the city, Jassy, a resident of Capitol Hill, has developed deep ties to Seattle. The sports-loving Jassy is part owner of Seattle’s new NHL franchise, the Kraken, and serves on the board of the Rainier Scholars educational foundation.
“Andy is well known inside the company and has been at Amazon almost as long as I have,” Bezos said in his email to employees. “He will be an outstanding leader, and he has my full confidence.”
Jassy will take over a company under increasing scrutiny from regulators. Amazon is facing numerous antitrust probes alleging price-fixing practices that harm third-party merchants selling on Amazon’s Marketplace platform.
Jassy’s ascension to CEO may refocus attention on Amazon’s cloud-computing division — which he has led since its infancy — and in turn, “take some regulatory heat off the company,” said Tom Forte, an analyst at the investment bank D.A. Davidson & Co.
“When Amazon decides for Jeff to hand the baton to Andy, they’re making a declaration that Amazon is a services company,” Forte said. “This is Amazon the great enabler, helping others make sales and profits selling off its platform rather than disrupting and hurting other businesses.”
Rep. Pramila Jayapal, D-Seattle, a member of the House Antitrust Subcommittee that issued a report last year interrogating what she called Amazon’s “monopolistic practices,” said in a statement that she intends to continue to “aggressively challenge dominant tech platforms such as Amazon and others and rein in anti-competitive behavior and monopolistic practices.”
“That is the only way the very innovation that allowed Amazon to thrive can be preserved for our region,” Jayapal said. “Though I have not often seen eye to eye with Mr. Bezos, I wish him all the best as he steps down as CEO.”
Seattle Times assistant business editor Boaz Herzog and The Washington Post contributed to this report.