Amazon founder Jeff Bezos will step down as CEO later this year, transitioning to executive chair of the Amazon board.
Bezos will be succeeded as CEO by Andy Jassy, the founder and CEO of Amazon Web Services (AWS) who has been an Amazon employee since 1997.
The tech giant announced its surprise management shuffle with its 2020 fourth quarter earnings post on Tuesday in which Amazon also boasted net quarterly sales of US$125 billion – a 42 per cent increase on the same time in 2019 – and a whopping US$386 billion in net sales in 2020.
In an accompanying statement, Bezos said it was “invention” that drove his company to its new heights.
“We do crazy things together and then make them normal,” Bezos said.
“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.”
Amazon has been criticised for its practice of meeting with and investing in tech startups, only to launch a similar competing product of its own. It has also regularly been at the centre of disputes over poor conditions of Amazon’s warehouse workers.
In a letter to employees, Bezos said his transition out of the CEO role will help him focus on other projects and businesses.
“Being the CEO of Amazon is a deep responsibility, and it’s consuming,” he said.
“When you have a responsibility like that, it’s hard to put attention on anything else.
“As exec chair I will stay engaged in important Amazon initiatives but also have the time and energy I need to focus on the Day 1 Fund, the Bezos Earth Fund, Blue Origin, The Washington Post, and my other passions.
“I’ve never had more energy, and this isn’t about retiring. I’m super passionate about the impact I think these organisations can have.”
The Jeff Bezos story is quintessentially entrepreneurial.
At the age of 30, Bezos left his job as vice president of a Wall Street hedge fund to start an online bookstore in the garage of a rented home. Bezos' venture was naturally aided by a US$300,000 investment from his parents.
Within two months of going live in October 1995, Bezos’s online bookstore was pulling in US$20,000 a week as it sold books around the world.
Amazon went public in 1997 for US$18 per share. On the day Bezos announced he was stepping away from CEO, the Amazon share price closed at US$3,380.
Following his mantra of ‘get big fast’, Bezos expanded Amazon into other retail segments and by the turn of millennium his online bookstore was selling all manner of consumer goods and acquiring other businesses.
For all its expansion, Amazon was still having trouble turning a profit into the early 2000s as it burnt through the cash it earnt and borrowed to fuel rapid growth.
But Bezos tightened the belt by slashing his workforce and shutting down warehouses, and by 2003 the company announced a profit.
A year later, AWS was announced as a set of e-commerce tools to connect businesses with Amazon’s APIs and infrastructure, and by 2006 the first Simple Storage Service (S3) product was launched.
AWS has become the most profitable part of Amazon’s business, pulling in $US13.5 billion in profit last year, compared to the US$8.6 billion the retail company turned over in North American trade.