Jeff Bezos stepping down as Amazon CEO, transitioning to executive chair role

“If you do it right, a few years after a surprising invention, the new thing has become normal. People yawn. That yawn is the greatest compliment an inventor can receive,” Bezos said in an earnings release Tuesday.

Under Bezos’s stewardship, Amazon evolved from an upstart online bookseller into one of the world’s most popular Internet marketplaces able to quickly deliver a vast catalogue of products and services. Bezos’s creation helped set in motion a massive change in the way people around the world shop, as people began buying toothpaste to car parts to groceries on their PCs and phones. Amazon also triggered a sea change in physical retail, accelerating the shuttering of shopping malls and stores. That shift has only accelerated as the coronavirus pandemic fueled a surge in online shopping as worried customers shunned stores.

To make the e-commerce business run, Amazon had to create an array of computer data centers, stacked with rows upon rows of servers, to make sure the online marketplace could handle the growing business. That developed into a new market for the company, Amazon Web Services, a giant, profit-driving cloud computing operation that now powers websites around the world.

The company‘s meteoric growth delivered massive riches to shareholders and made Bezos — depending on the day — the richest man on the planet. For all the praise on Wall Street, however, Bezos and his brass-knuckled tactics also carried great cost. Regulators increasingly viewed Amazon as a threat to competition, and the company’s own workers at times told grim tales about their mistreatment, as they sought to carry out Bezos’s mission to create a consumer-first “everything store.” Amazon for years faced fierce criticism for underpaying workers, only to boost its minimum wage to $15 an hour in 2018. It came under fire at the beginning of the pandemic for what workers said was a lack of precautions. It’s fighting an aggressive union drive at its Bessemer, Ala., warehouse, where employees are pressing for better working conditions and higher pay.

Bezos, who turned 57 last month set up the transition to Jassy last summer, when the company announced that one of his possible successors, Jeff Wilke, would soon retire. That paved the way for Jassy to take the CEO job.

To Tom Alberg, a venture capitalist and longtime Amazon director who stepped down from the board two years ago, Jassy was the obvious choice.

“Andy has lived his whole life in that culture, and that culture is so strong,” Alberg said.

Jassy’s Amazon career is defined by his leading Amazon into a wholly new market, cloud computing, a business the company has come to dominate just as aggressively as it leads in the world of e-commerce. And the fact that Jassy now succeeds Bezos offers insight into Amazon: that the company still values high-risk, high-reward bets and is less defined by online shopping than some might think.

Jassy joined the company in 1997 after graduating from Harvard Business School. At the time, Amazon had only a few hundred employees and had just gone public. The executive pioneered the company’s entry into music sales, Amazon’s first push outside books. In the early 2000s, Jassy shadowed Bezos as his technical assistant, something of a chief-of-staff role. And he helped launch AWS, which upended the software industry with its ability to rent space and software programming for customers to run their technical operations on Amazon’s vast array of servers.

Bezos’s own interests have changed over the years as he personally pushed into new industries. That included launching Blue Origin about 20 years ago, a space-travel company with the stated goal of “millions of people living and working in space.” Although the company has struggled, Bezos has invested to the tune of $1 billion a year in the company and rhapsodizes about a future in which humans live in massive habitats in orbit and mine asteroids. He has said it “is the most important work I’m doing.”

“When you have a responsibility like that, it’s hard to put attention on anything else,” he said.

And he’ll continue to play an important role at Amazon. The company’s finance chief, Brian Olsavsky, said Bezos will remain “very involved” even after he moves into his new role.

“We expect a lot of continuity with this transition,” Olsavsky said in a call with journalists Tuesday afternoon. Bezos, he added, is “is going to have his imprint on new product developments and also key leverage areas of innovation.”

Olsavsky declined to say when Bezos first approached the board about the transition to a new role, except to say that it had been planned and was done in consultation with Amazon’s directors. Five years ago, Amazon changed its management structure, naming both Jassy and Wilke division CEOs, a move that allowed Bezos to delegate many day-to-day tasks. Olsavsky said this transition was similar.

“We see the same thing happening here,” Olsavsky said. “Jeff is going to remain with Amazon in a very important role as executive chair.”

What’s more, Bezos remains Amazon’s largest individual shareholder.

“Jeff is really not going anywhere,” Olsavsky said. “This is more of a restructuring of who’s doing what.”

One thing Bezos may do less of: Be the public face of Amazon. Last summer, Bezos was summoned to Capitol Hill to testify virtually alongside the CEOs of Apple, Google and Facebook before a House antitrust subcommittee investigation on the clout of the tech behemoths. That spotlight will now fall on Jassy, and politicians are already preparing.

“I have some questions for Mr. Jassy,” tweeted Rep. Ken Buck (R-Colo.), the top Republican lawmaker on a key House antitrust panel.

As Amazon has grown, Bezos has increasingly become its focus, in part because the company’s soaring stock value has put his personal wealth into the stratosphere. According to the Bloomberg Billionaires Index, Bezos is the second-wealthiest person with $188 billion, which is $2 billion behind Tesla founder Elon Musk. He also has transformed his image, morphing from a nerdy, khaki-wearing tech exec to a buff, stylishly dressed socialite who attends Hollywood awards shows and New York fashion balls.

Bezos’ wealth declined in April 2019 when he divorced from MacKenzie Scott, after his relationship with a former news anchor, Lauren Sanchez, became public. The record divorce settlement gave Scott 25 percent of Bezos’s Amazon holdings, although Bezos retained sole voting power over the shares the two once jointly controlled, which at the time amounted to 16 percent of Amazon’s total shares.

Like most large corporations, Amazon has been preparing its CEO succession plan for years. Still, Alberg, the former Amazon director who participated in that planning over the years, was surprised by the timing of Bezos’s move, in part because he has always managed to juggle his different interests.

“I was just not expecting Jeff to step aside right now,” Alberg said. “He’s always been able to do a lot of things simultaneously.”

Amazon botched an attempt at bringing in an outsider as president and chief operating officer in 1999, when it hired Joe Galli from Black & Decker. Galli lasted a year, and Bezos decided to focus instead on building a strong bench of internal candidates for top jobs and ultimately to take over for him, Alberg said.

“He wanted it to be somebody he knew well and the company knew well,” Alberg said.

Bezos’s next endeavors may turn out to be as significant as the second act of his Seattle-area neighbor Bill Gates, Alberg said. The Microsoft co-founder has gone on to burnish his image as one of the world’s leading philanthropists in the time after he began moving away from Microsoft in 2000, when he gave up the chief executive post he had long held. Bezos’s focus on space travel and climate change could have the same lasting impact, Alberg said.

“I think he’ll be like Gates,” Alberg said. “Twenty years from now, he’ll be remembered for one or more of those things as well.”