Amazon CEO Jeff Bezos to step down as e-commerce giant celebrates first-ever $100bn revenue quarter

Bezos confirms he is stepping down as Amazon CEO and will take on the role of executive chairman, as company posts record-breaking fourth-quarter results

Amazon founder and CEO Jeff Bezos will hand over the reins of the company to the head of the e-commerce giant’s cloud computing arm, Andy Jassy, during the second half of 2021.

News of the change in company leadership coincided with the publication of Amazon’s record-breaking fourth-quarter financial results, which saw the firm breach the $100bn quarterly revenue mark for the first time in its history.

Bezos will become executive chairman of the Amazon board during the third quarter of 2021, with Jassy taking over as CEO at the same time.

Bezos confirmed the news in an open letter to Amazon’s 1.3 million-strong employee base, in which he hailed Jassy’s suitability as his successor, while going on to shed some light on his reasons for stepping down as CEO.

“Being CEO of Amazon is a deep responsibility, and it’s consuming,” he wrote. “When you have a responsibility like that, it is hard to put attention on anything else.”

Bezos went on to state that his transition to the role of executive chairman is not a sign of his impending retirement, but will ensure he has the “time and energy” to focus on his other business endeavours, including the climate change-addressing Bezos Earth Fund.

“Amazon couldn’t be better positioned for the future,” the letter continued. “We are firing on all cylinders, just as the world needs us to. We have things in the pipeline that will continue to astonish.

“We serve individuals and enterprises, and we’ve pioneered two complete industries and a whole new class of devices. We are leaders in areas as varied as machine learning and logistics, and if an Amazonian’s idea requires yet another institutional skill, we’re flexible enough and patient enough to learn it.”

At the time of writing, it remains to be seen who will take over from Jassy, who has worked at Amazon since 1997 and has served as CEO of Amazon Web Services (AWS) since 2016.

During a conference call with analysts, transcribed by Seeking Alpha, Amazon CFO Brian Olsavsky talked up Jassy’s credentials and experience of running AWS as playing a major part in the decision to make him Bezos’ successor.

“He is not only a visionary leader, he is a strong operator…and has got a great track record of developing multiple things and businesses within Amazon, not the least of which is AWS, which is arguably the most profitable and important technology company in the world,” said Olsavsky.

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News of Amazon’s senior management shift coincided with the release of the company’s fourth-quarter and full-year financial results, which saw the company record its largest-ever quarterly revenue, with sales valued at $125.56bn – up 44% from $87.4bn in Q4 2019.

The company had previously predicted that its quarterly revenue would be somewhere between $112bn and $121bn for the three months to 31 December 2020, and its Q4 performance will go down on record as the first time in its history that its quarterly revenue has breached $100bn.

From a full-year perspective, Amazon’s revenue was up 38% year-on-year and hit $386.1bn, up from $280.5bn in 2019.

Amazon also reported a quarterly profit of $7.2bn, up from $3.3bn in Q4 2019, as well as a full-year profit of $21.3bn compared with $11.6bn in 2019.

The final quarter of the year is renowned for being the busiest reporting period for Amazon, and the higher-than-expected quarterly revenue figure it reported this year can be attributed to the heightened demand for online shopping seen throughout the Covid-19 pandemic, combined with the usual seasonal uptick in sales during the holiday season.

“Our Q4 results also largely reflect the continuation of demand trends we have seen since the early months of the pandemic, particularly as people are staying at home, including for household staples and other home products,” said Olsavsky.

Over the course of 2020, the company incurred $11.5bn in Covid-related costs, and took on half a million new employees – including 175,000 in Q4 alone – to help it to accommodate the surge in demand for online shopping the firm has seen since the onset of the pandemic, he added.

To keep its staff safe, Amazon confirmed that 700 employees across the world are tested for Covid-19 every hour. Meanwhile, those working in essential roles – including staff at its fulfilment warehouses and datacentres – are being urged to get the coronavirus vaccine as soon as possible, said Olsavsky.

The acceleratory effect the pandemic has had on cloud-based digital transformation within the enterprise market has also benefited AWS, with Olsavsky confirming that its cloud business added more revenue “quarter-over-quarter and year-over-year” than in any quarter in AWS’s history.

AWS generated revenue of $12.7bn during Q4, which equates to a 28% year-on-year growth rate, and marks the business division out as a $51bn annualised run-rate business within Amazon, said Olsavsky.

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