Amazon founder Jeff Bezos will step down from his role as chief executive later this year and transition to the role of executive chair, the company said Tuesday. He will be replaced by Andy Jassy.
Bezos has been Amazon’s CEO since its founding in 1995. He oversaw its growth from an online bookseller into a $1.7 trillion global retail and logistics behemoth, which has also made Bezos one of the world’s richest people. Jassy has worked for Amazon since 1997 and currently serves as CEO of the company’s cloud business, Amazon Web Services, which is its biggest profit driver.
Bezos said in a letter to employees Tuesday that he is excited about the transition.
“Being the CEO of Amazon is a deep responsibility, and it’s consuming,” Bezos wrote. “When you have a responsibility like that, it’s hard to put attention on anything else. 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. I’ve never had more energy, and this isn’t about retiring. I’m super passionate about the impact I think these organizations can have.”
NEW: Here’s the full letter Jeff Bezos wrote to Amazon employees upon stepping aside as CEO https://t.co/AzBfoGQvQP pic.twitter.com/Wn3OSLnGIB
— Bloomberg (@business) February 2, 2021
Impact on Stock Market
The announcement set off alarm bells on Wall Street and throughout the business community, though the transition does not necessarily portend any significant change to Amazon’s business. Amazon reported a year of record growth on Tuesday including a 38 percent increase in net sales from 2019, netting the company $21 billion in income, nearly double from the year before. Investors didn’t seem fazed by the news, either. Amazon’s share price was almost unchanged following the announcement.
Net income in the quarter hit $7.2 billion — nearly double the $3.7 billion Wall Street predicted; and more than double the $3.3 billion in income the company earned in the year-ago quarter. Earnings per diluted share were $14.09.
The quarterly results include sales from Prime Day; which was held October 13-14 after being postponed over the summer because of the pandemic.
As for the full year, Amazon reported net sales increased 38% to $386.1 billion, more than $6 billion more than analysts had projected. Net income for 2020 reached $21.3 billion, or $41.83 per diluted share, an increase of nearly 84% from a year earlier.
Andy Jassy, who currently heads Amazon Web Services, will take over as Amazon CEO from Jeff Bezos later this year.
In Jassy, Bezos is tapping a longtime Amazon employee; who first joined in 1997 and built the company’s cloud services business; which started as a small addition to its eCommerce operations; but has grown in recent years to become a major part of its profits; and one of the leaders of the cloud computing industry.
The move marks a major turning point in one of the most successful entrepreneurial runs in American history. Bezos founded Amazon in 1994 as an online bookstore; survived the dot-com bubble in the early 2000s; and built the company into one of the largest employers in the U.S.; with a network of facilities touching almost every part of the country.