Saturday, December 3, 2022

As Jeff Bezos steps down, what happens next for Amazon?

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The news that Jeff Bezos would be stepping down as Amazon’s CEO came as a surprise, but there were signs it might have been on his mind for some time.

“He greatly admired the Microsoft succession process,” said Jeffrey Sonnenfeld, professor of leadership at the Yale School of Management, of a conversation he had with the founder of Amazon in 2007.

He said he tried unsuccessfully to get Mr Bezos to discuss his own succession plans at a live event. “I think he didn’t want to tilt his hand, nor suggest that there was some kind of internal horse racing.

But more than a decade later, Mr. Bezos is indeed following Microsoft’s model. In the third quarter, he will move – as Bill Gates did – from day-to-day racing to a broader strategic leadership role.

With few signs of a horse race, Andy Jassy, ​​the current head of Amazon’s cloud computing division, will become the new chief executive.

Amazon insisted that Mr Bezos, as executive chairman, would only be involved in what he described as ‘one-sided’ decisions, from which there is no turning back .

Amazon distribution warehouse since 1999, Seattle, USA © Barry Sweet / AP

An Amazon distribution center in Peterborough, UK © Luke MacGregor / Bloomberg

Brian Olsavsky, chief financial officer of Amazon, said that would include “the most important decisions: things like acquisitions, things like strategies and going to the grocery store and other things.”

The move ends growing speculation in recent years – in part sparked by his much-publicized 2019 divorce from MacKenzie Bezos – that Mr Bezos, 57, was determined to a second act beyond directing the company. company he has been running ever since. more than a quarter of a century.

By this time, he became arguably the most successful businessman of his generation, building a business worth $ 1.7 billion, employing 1.3 million people, and transforming more than half of US adults into Amazon Prime subscribers, analyst estimates.

He has redefined the retail and IT industries and can take credit for pioneering innovations in logistics, robotics, mobile technology and artificial intelligence. In the process, he built a personal fortune of nearly $ 200 billion.

But his letter to staff on Tuesday confirmed what many predicted: Mr Bezos now wants to look to his most recent projects, listed on its Bezos Expeditions website, like the fight against climate change, his newspaper The Washington Post and his space exploration startup Blue Origin, which aims to take members of the public to space for the first time this year.

“I’ve never had more energy and it’s not about retiring,” he writes. “I am very passionate about the impact I think these organizations can have.”

Now that he has set a date for his transition, the message the company wanted to convey to investors on Tuesday was a message of comfort. “Jeff is not leaving,” Mr. Olsavsky said. “He has a new job.”

An advantage for Mr. Bezos, who has only done his first appearance before Congress last year, is an opportunity to avoid some of the growing political turmoil associated with Amazon’s immense size, the way it treats its workers, and the extent to which its products and services affect the privacy and civil liberties of the nation. public.

“When was the last time you saw Larry and Sergey get grilled by the House Antitrust Subcommittee?” said Scott Galloway, professor of marketing at NYU Stern, referring to Google co-founders Larry Page and Sergey Brin, who have largely disappeared from the public eye since Sundar Pichai was appointed CEO of Google in 2015.

“I do not think so [Bezos] wants to spend the next 12 months of his life in a Senate boardroom, ”added Professor Galloway. “He’ll be at the Cannes Film Festival when all of this happens.”

Jeff Bezos speaking by videoconference at a House Judiciary Subcommittee hearing in Washington © Graeme Jennings / Bloomberg

Mr Bezos poses with children at the Club for the Future after the unveiling of the lunar lander for his space company Blue Origin © Clodagh Kilcoyne / Reuters

The tricky questions will now fall to Mr Jassy, ​​53, who has already shown skill in dealing with difficult questions about Amazon’s market power, telling broadcaster PBS in an interview a year ago that ‘it held a’ relatively small share of the overall market. segments in the categories in which we operate ”.

Mr. Jassy joined Amazon in 1997 after completing an MBA at Harvard and made a questionable first impression, accidentally hitting Mr. Bezos with a kayak paddle on a day at the company. He was later one of the first “shadows” of Mr. Bezos, assistants who followed him and absorbed his management style and business philosophy, according to The store of everything, a book on the history of the company.

Most importantly, Mr. Jassy led Amazon’s cloud computing division, AWS, from an initial idea in 2003 through its launch in 2006, to what it is today: the dominant cloud computing company in world, which powers everything from Netflix streaming services to CIA intelligence. gathering. AWS made a net profit of $ 13.5 billion in 2020, far more than Amazon’s famous retail division.

AWS’s enduring success means that those inside and outside the company have long viewed Mr. Jassy as a logical successor, particularly after the departure last year of Jeff Wilke, head of consumer affairs at the company. ‘Amazon, who announced his early retirement in August.

“In my opinion, there is no better business continuity manager for the business as a whole,” said Scott Chancellor, former managing director of AWS who worked for seven years under the leadership of Mr. Jassy at AWS before leaving in May 2019. “Andy and Jeff are very well cut from the same fabric, very similar in terms of the way they think.

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Mr Jassy’s rise could also help blur the lines between AWS and the rest of the company, defending against calls to break up, suggested Professor Sonnenfeld, who said it could provide “icing on the cake.” the cake”.

Positive sentiment was reflected in the hours following the news of Mr Bezos’ pullback, with Amazon’s share price barely moving past trading hours – seen as a strong sign of support for Mr Jassy of Wall Street.

Above all, analysts expect the new leader to make few changes to the foundations established by his predecessor.

“You’re going to see the same steady hand on this bar that we’ve seen since the inception of the company,” said Charlie O’Shea, senior Amazon analyst at Moody’s. “A similar hand, but a different hand. I don’t expect anything to change.

“If I am an investor, I am not concerned. I don’t even see a wispy white cloud on the horizon for this, I think it will be transparent.

Jeff Bezos jostles

Jeff Bezos unveils lunar lander for his space company Blue Origin

Jeff Bezos unveils the lunar lander for his space company Blue Origin © REUTERS

Blue origin

Jeff Bezos is locked in a space race with fellow billionaire Elon Musk, as Blue origin and SpaceX prepare for a key year. Blue Origin’s last test, in January, successfully launched and landed its New Shepard rocket and capsule with a dummy person inside, with a view to taking members of the public to the edge of the space, possibly late 2021.

In 2012, Mr. Bezos also funded a mission to recover the F-1 rocket engines used in the Apollo 11 mission. from the seabed.

The Earth Fund

About a year ago, Mr Bezos announced that he would spend $ 10 billion to fight climate change. He then donated nearly $ 800 million to a group of climate change charities, but has so far not spoken of its broader strategy.

The Washington Post

Under Mr. Bezos’ ownership, the Washington Post returned to profit and expanded its newsroom to more than 1000 journalists.

The 10,000 year clock

Mr. Bezos is build a giant clock inside a mountain in West Texas that will keep time for the next 10,000 years.

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