Business

By 2021's third quarter, Jeff Bezos will no longer be CEO of Amazon

The company reported its third consecutive record profit and quarterly sales above $100 billion for the first time

FILE PHOTO: Jeff Bezos, president and CEO of Amazon and owner of The Washington Post, speaks at the Economic Club of Washington DC's "Milestone Celebration Dinner" in Washington, U.S., September 13, 2018. REUTERS/Joshua Roberts/File Photo
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  • In 2020 as a whole, the company’s net sales increased 38% to $386.1 billion, compared with $280.5 billion in 2019;
  • Bezos started the company 27 years ago as an internet bookseller;
  • He said that he sees “Amazon at its most inventive ever, making it an optimal time for this transition”.

A few hours before its conference call with analysts to announce its 2020’s Q4 results this Tuesday, Amazon disclosed a press release announcing that Jeff Bezos “will transition to the role of Executive Chair in the third quarter of 2021” and that “Andy Jassy will become Chief Executive Officer at that time”.

Amazon is what it is because of the invention. We do crazy things together and then make them normal. We pioneered customer reviews, 1-Click, personalized recommendations, Prime’s insanely-fast shipping, Just Walk Out shopping, the Climate Pledge, Kindle, Alexa, marketplace, infrastructure cloud computing, Career Choice, and much more,” said Jeff Bezos, Amazon founder, and CEO in the statement.

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“If you do it right, a few years after a surprising invention, the new thing has become normal. People yawn. That yawn is the greatest compliment an inventor can receive. When you look at our financial results, what you’re actually seeing are the long-run cumulative results of invention. Right now I see Amazon at its most inventive ever, making it an optimal time for this transition.”

The company reported its third consecutive record profit and quarterly sales above $100 billion for the first time. In 2020 as a whole, the company’s net sales increased 38% to $386.1 billion, compared with $280.5 billion in 2019. Excluding the $1.4 billion favorable impact from year-over-year changes in foreign exchange rates throughout the year, net sales increased 37% compared with 2019.

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

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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 the 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

Jassy’s AWS, traditionally a bright spot, fell slightly short of expectations. While the cloud computing division announced deals in the quarter with ViacomCBS, the BMW Group and others, it posted revenue of $12.7 billion, short of the $12.8 billion analysts had estimated.

Amazon said it was not announcing a replacement for Jassy at this time.

Amazon’s 2020 main results

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.

With its warehouses open, Amazon had another record holiday, beating estimates for online store sales, subscription sales, third-party service sales such as warehousing and other sales to merchants on its platform.

Jassy’s Amazon Web Services (AWS), traditionally a bright spot, fell slightly short of expectations. While the cloud computing division announced deals in the quarter with ViacomCBS, the BMW Group, and others, it posted revenue of $12.7 billion, short of the $12.8 billion analysts had estimated.

A boost in revenue came from moving Amazon’s marketing event Prime Day – usually in July – to October, lengthening the holiday shopping season.

In Latin America, the company’s earnings report highlights two AWS new commitments and migrations spanning major industries: Itaú Unibanco (Latin America’s largest bank) and Mercado Libre (Latin America’s largest online commerce and also a payments provider).

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