What’s in store for Amazon after Jeff Bezos bows out?

Jeff Bezos, Amazon’s founder and CEO, is stepping down after 27 years in charge. What will change at the e-commerce behemoth? Matthew Partridge reports

In a “surprise move”, Amazon announced last week that its founder Jeff Bezos is stepping down as CEO, says James Titcomb in The Daily Telegraph. Bezos will move to the role of executive chairman in the third quarter of this year, allowing him “more time for interests in other areas”. Andy Jassy, the current head of Amazon’s successful cloud-computing division, will replace Bezos as CEO. The announcement came as the company posted record sales, surpassing $100bn in a single quarter for the first time as it benefited from lockdowns that have “pummelled physical retailers”.

Bezos won’t disappear, say Nils Pratley in The Guardian. As chairman he “will still run the board” and have “freedom to roam wherever he wishes”. If Bezos and Jassy disagree, “everybody knows who will prevail” given that Bezos “owns 10% of the shares”. The move may be a largely cosmetic device to enable him to “avoid the next grilling in front of US lawmakers” over Amazon’s treatment of small businesses, workers or anti-trust issues. With Bezos still making the big corporate decisions “real change at Amazon may be hard to detect”.

The “everything store”

Investors should certainly not expect the business model of the so-called “everything store” to change radically under the new management team, says Lex in the Financial Times. Not only will Bezos still “oversee the business” in his new role, even after his departure, but his replacement is also hardly someone who will look to shake things up. Jassy “has been with Amazon for 24 years, joining straight out of Harvard Business School” and is both a “loyal employee and successful business developer”.

Still, things are unlikely to remain completely the same, says Jim Armitage in the Evening Standard. The move “could signal a shift in the group’s focus towards more business-to-business operations”. Jassy has successfully run Amazon Web Services (AWS), which now “powers around 45% of the world’s cloud-hosted websites”. AWS was already “the biggest profit generator at Amazon before lockdown”, but with the restrictions driving businesses “to digitise their systems and power them remotely through the cloud”, it has “grown massively since”. There have even been rumours that AWS could be split from the company, though Jassy’s elevation makes this unlikely.

AWS has been “one of Amazon’s jewels”, booking “more than half of its operating profit despite accounting for just 12% of total sales”, says Jennifer Saba on Breakingviews. But it must keep growing fast as the rest of the business faces increased pressure. Operating costs shot up by 42% in the fourth quarter “because costs associated with worldwide shipping rose about two-thirds”. It expects sales volumes to drop by 25% this quarter compared with the previous three months as vaccines and the end of lockdown create more choice about where to buy goods. 

Recommended

The best 0% balance-transfer credit cards
Credit cards

The best 0% balance-transfer credit cards

These 0% balance transfer credit cards offer some of the best deals on the market today.
26 May 2023
Where do we go from here?
Investments

Where do we go from here?

A new series of interviews from MoneyWeek
26 May 2023
Best savings accounts – May 2023
Savings

Best savings accounts – May 2023

Interest rates have been creeping up - we look at the best savings accounts on the market right now.
26 May 2023
The best one-year fixed savings accounts - May 2023
Savings

The best one-year fixed savings accounts - May 2023

You can now earn 5% on 1 year fixed savings accounts - the best rate seen in 14 years. We have all the latest rates available now.
26 May 2023

Most Popular

Nationwide to give £100 cash boost to customers
Personal finance

Nationwide to give £100 cash boost to customers

Nationwide Building Society is giving customers £100 as it reinvests profits. Dubbed the Nationwide Fairer Share scheme, we look at who is eligible.
22 May 2023
Share tips of the week – 26 May
Investments

Share tips of the week – 26 May

MoneyWeek’s comprehensive guide to the best of this week’s share tips from the rest of the UK's financial pages.
25 May 2023
Holiday rip-off: Millions of travellers hit with hidden costs by using debit card abroad
Personal finance

Holiday rip-off: Millions of travellers hit with hidden costs by using debit card abroad

A family of four on a week-long trip to France could pay an extra £212 in fees by using their everyday bank card compared to the lowest-cost option, a…
23 May 2023