Amazon CEO Jeff Bezos is planning to step down.
James Martin / CNET
Amazon CEO Jeff Bezos will step down later this year, passing the reins of the world’s largest e-commerce company to Andy Jassy, a longtime lieutenant who runs Amazon Web Services. Amazon nestled the news in its fourth-quarter earnings announcement, which exceeded expectations.
The transition occurs as Amazon goes through a complicated period in its history. The company is making huge profits as consumers, trapped at home because of the COVID-19 crisis, become more dependent on both e-commerce and online services. That, in turn, drew regulatory scrutiny from lawmakers concerned about the power Amazon has over retailers who use it as an online store.
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Amazon’s power was widely displayed in the fourth quarter. Net income rose to $ 7.2 billion, or $ 14.38 per share, from $ 3.3 billion a year ago. Net sales jumped 44% to $ 125.6 billion. Both figures easily exceeded Wall Street’s estimates of $ 7.23 per share in earnings and $ 119.7 billion in net sales, according to Yahoo Finance. (Amazon previously forecast sales between $ 112 billion and $ 121 billion.)
Bezos will step down after building a juggernaut that remodeled online retail and gained market share in the cloud computing industry by building the infrastructure that Amazon needed to operate its own giant sales platforms. He also oversaw the efforts that created devices from the Kindle e-reader for the echo smart home system, forays into television and movies with Prime Video and ventures into the world of groceries, including the buying Whole Foods Markets. He even went on podcasts, with a subscription service and the purchase of podcast editor Wondery.
Jassy is an experienced Amazon employee who started the company in 1997. He shaped AWS from the beginning and became the head of the division in 2016.
While most people know Amazon for its e-commerce operations, AWS is generally responsible for most of Amazon’s revenue. It generated $ 12.7 billion in net sales in the fourth quarter. AWS dominates the cloud services market, accounting for about a third of the market share. The division provides companies with database storage and cloud computing services, including support for machine learning and artificial intelligence efforts.
Jassy is not as well known as Bezos, but he talks about controversial technology issues. In 2019, he criticized President Donald Trump for including policy in the bidding process for a major Defense Department contract that Microsoft ended up winning.
He is also advocated Amazon’s development of facial recognition tools, saying that governments must have access to the most advanced technology to keep their citizens safe. In a 2019 interview with PBS Frontline, Jassy indicated that he was aware of the potential abuse of AWS technology. “If there is any documented evidence of people who misuse the technology, we will suspend people’s ability not only to use the technology, but to use AWS,” he said, addressing concerns about authorities using facial recognition.
The company followed the sentiment last month, suspending cloud hosting services to the social media platform Parler for not moderating content that advocated violence after Parler was used by protesters who invaded the Capitol on January 6.
Amazon entered the last three months of 2020 having generated a huge profit, although it spent billions to solve logistical problems presented by the coronavirus pandemic, which saw the company struggle to keep up with an increase in orders in April. At the time, Bezos warned that Amazon could spend more than $ 4 billion to deal with the pandemic that quarter. Amazon designed would spend a lot again in the last three months of 2020 dealing with the pandemic.
The company also faced the challenge of keeping its vast workforce protected from coronavirus. In October, Amazon said the virus had infected 20,000 U.S. frontline employees, including supermarket workers at Amazon’s Whole Foods Market. The company has implemented safety and testing measures to protect workers.
End-of-year sales were largely designed to boost Amazon’s revenue, as e-commerce companies saw an increase in customers in the block and delivered. In its press release, the company said it broke its holiday records, “delivering more than a billion toys, home, fashion, electronics, beauty and personal care products to customers worldwide.”
In a liaison with investors, Amazon CFO Brian Olsavsky said the company will have to keep spending to meet the pandemic’s demands. “Hopefully, the vaccine continues,” he said.