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

Passive investors beware: you may be dangerously overexposed to big tech stocks
Stockmarkets

Passive investors beware: you may be dangerously overexposed to big tech stocks

Most investors in index funds are likely to be dangerously over-invested in US stocks, and particularly in a few huge tech stocks. It’s time to think …
15 Feb 2021
US stockmarkets shrug off signs of overheating
US stockmarkets

US stockmarkets shrug off signs of overheating

Signs of overheating in the markets are everywhere, but that didn't stop US stocks hitting new record highs last week.
29 Jan 2021
Five online retail stocks to diversify your portfolio with
Share tips

Five online retail stocks to diversify your portfolio with

Professional investor Tancredi Cordero, founder and CEO of Kuros Associates, selects five of his favourite online retail stocks to buy now.
18 Jan 2021
US stockmarkets shrug off the mob's rampage through the US Capitol building
US stockmarkets

US stockmarkets shrug off the mob's rampage through the US Capitol building

US stockmarkets seem more interested in the results of Senate elections in Georgia than on the lawless mob's raid on the country's Capitol building.
14 Jan 2021

Most Popular

Lab-grown meat: how “moo’s law” will drive innovation
Soft commodities

Lab-grown meat: how “moo’s law” will drive innovation

Jim Mellon and Anthony Chow, co-founders of Aim-listed Agronomics, explain why they believe that “cellular agriculture” will benefit from massive long…
16 Apr 2021
Lab-grown meat: the new agricultural revolution
Soft commodities

Lab-grown meat: the new agricultural revolution

Vegan alternatives are taking off, but the future of food technology lies in lab-grown meat – cultivating steaks and burgers from animal cells, says A…
16 Apr 2021
The bitcoin bubble will burst: here’s how to play it
Bitcoin

The bitcoin bubble will burst: here’s how to play it

The cryptocurrency’s price has soared far beyond its fundamentals, says Matthew Partridge. Here, he looks at how to short bitcoin.
12 Apr 2021