Jeff Bezos to step down as Amazon CEO as sales rocket past US$100 billion

Amazon CEO Jeff Bezos walking on stage at a press conference where he introduced new Kindle products, on Sept 6, 2012.
Amazon CEO Jeff Bezos walking on stage at a press conference where he introduced new Kindle products, on Sept 6, 2012.PHOTO: EPA-EFE
Amazon CEO Jeff Bezos participates in the unveiling of an Amazon environmental initiative entitled 'The Climate Pledge', on Sept 19, 2019.
Amazon CEO Jeff Bezos participates in the unveiling of an Amazon environmental initiative entitled 'The Climate Pledge', on Sept 19, 2019.PHOTO: EPA-EFE
Amazon CEO Jeff Bezos speaks at the grand opening of the Amazon Spheres, in Seattle, Washington, on Jan 29, 2018.
Amazon CEO Jeff Bezos speaks at the grand opening of the Amazon Spheres, in Seattle, Washington, on Jan 29, 2018.PHOTO: AFP
Mr Jeff Bezos holding the new Kindle Fire HD at the product's introduction in Santa Monica, California, on Sept 6, 2012.
Mr Jeff Bezos holding the new Kindle Fire HD at the product's introduction in Santa Monica, California, on Sept 6, 2012.PHOTO: NYTIMES

NEW YORK (REUTERS, AFP) - Amazon on Tuesday (Feb 2) said founder Jeff Bezos will step down as chief executive officer and become executive chairman, as the company reported its third consecutive record profit and quarterly sales above US$100 billion (S$133 billion) for the first time.

The transition, slated for the third quarter, will make current cloud computing chief Andy Jassy Amazon's next CEO.

Net sales rose to US$125.56 billion as consumers turned to the world's largest online retailer for holiday shopping, beating analyst estimates of US$119.7 billion, according to IBES data from Refinitiv.

Mr 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."

Amazon shares were up less than 1 per cent in after-hours trading.

Mr Jassy joined Amazon in 1997 and has an 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.

Mr Tom Johnson, chief transformation officer at Mindshare Worldwide, said Mr Jassy's promotion underscored the importance of Web services to Amazon's future.

"Jassy's background in steering AWS shows just how top of mind those services are to Amazon's business strategy. It will be interesting to see how that affects their strategy and balancing that priority with a growing ad business and the commerce behemoth," he said.

Mr 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 US$12.7 billion, short of the US$12.8 billion analysts had estimated.

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

Since the start of the coronavirus outbreak in the United States, consumers have turned increasingly to Amazon for delivery of home staples and medical supplies. Bricks-and-mortar shops closed their doors; Amazon, the world's largest online retailer, instead recruited more than 400,000 more workers and posted consecutive record profits.


Mr Bezos (above), Amazon's driving force since its founding, will become executive chairman. PHOTO: NYTIMES

Amazon chief financial officer Brian Olsavsky told reporters on a conference call that costs associated with the pandemic in the first quarter are expected to total US$2 billion, down from US$4 billion in the fourth quarter.

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.

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

Now 57, Mr Bezos founded Amazon in 1994 and went on to grow it into a colossus that dominates online retail, with operations in streaming music and television, groceries, cloud computing, robotics, artificial intelligence and more.

"This journey began some 27 years ago," Mr Bezos said in the letter to Amazon employees.

"As much as I still tap dance into the office, I'm excited about this transition," he wrote.

In announcing the news, Mr Bezos said he will remain engaged at Amazon but also devote time to his other businesses, including The Washington Post newspaper and the private space firm Blue Origin.

He also will concentrate on his philanthropy efforts, which include his Day One Fund and the Bezos Earth Fund, to which he made a US$10 billion donation last year.

"I've never had more energy, and this isn't about retiring. I'm super passionate about the impact I think these organisations can have," he wrote.

The move by Mr Bezos comes after his former wife MacKenzie Scott had seized the spotlight in the philanthropic arena by pledging to give away the majority of her wealth to social causes, starting with nearly US$6 billion last year to a variety of organisations chosen with the help of advisers.

Transforming, innovating

Mr Bezos's stake in Amazon gives him a personal worth of some US$196 billion, making him the world's richest individual, ahead of Tesla founder Elon Musk who briefly held that distinction.

The stunning rise of Amazon has come amid a rapid global expansion and taking risks with its investments and innovation.

"It is hard to believe that Mr Bezos only founded the company some 26 years ago," said analyst Neil Saunders of research firm GlobalData.

"Into that short period has been crammed a whole lifetime of innovation and entrepreneurship that have transformed not only the company's fortunes, but also the whole shape and configuration of the retail sector.

"Its relentless focus on the customer and its constant pursuit of finding better ways of doing business made it not only a survivor, but also a leader of the Internet age."

In the headlines

Mr Bezos has been in the headlines in recent years not only for his business success, but also for his 2019 divorce from Ms MacKenzie, his wife of 25 years, and a blackmail attempt that he decided to make public.

He stood up to the National Enquirer, controlled by then President Donald Trump's ally, Mr David Pecker, who threatened to release lurid, intimate pictures of Mr Bezos and his mistress, by making details of the exchanges public himself.

"If in my position I can't stand up to this kind of extortion, how many people can?" Mr Bezos wrote on Medium.


In a photo taken on Jan 6, 2018, Amazon CEO Jeff Bezos and Ms MacKenzie Scott are seen attending the 7th Annual Sean Penn & Friends Gala in Hollywood, California. PHOTO: AFP

Road to riches

Mr Bezos' penchant for experimenting reportedly dates to a young age - with one widely shared story recounting how he tried to dismantle his own crib as a toddler.

His mother was a teenager when she gave birth to Mr Bezos in Albuquerque, New Mexico, on Jan 12, 1964.

She remarried when her son was about four years old, and he was legally adopted by his Cuban immigrant stepfather, who worked as an engineer at a petrochemical company.

"My dad came here from Cuba all by himself without speaking English when he was 16 years old, and has been kicking ass ever since," Mr Bezos said in a Father's Day tweet.


In a photo from May 9, 2019, Mr Bezos poses with children from "Club for the Future" after Blue Origin's space exploration lunar lander rocket was unveiled. PHOTO: REUTERS

Mr Bezos was enchanted by computer science when the information technology industry was in its infancy and he studied engineering at Princeton University.

After graduating, he put his skills to work on Wall Street, where by 1990 he had risen to be a senior vice-president at investment firm D.E. Shaw.

But about four years later, he surprised his peers by leaving his highly paid position, backed by money borrowed from his parents, to open an online bookseller called Amazon.com.

Looking back at the journey so far, he offered this advice in his parting letter to staff: "Keep inventing, and don't despair when at first the idea looks crazy."