On February 3rd, Jeff Bezos announced that he will be stepping down as the CEO of Amazon, effective the third fiscal quarter of this year. He will be replaced by Andy Jassy, CEO of Amazon’s cloud computing subsidiary, Amazon Web Services.
Since Amazon’s founding in Bezos’s garage in 1994, Bezos has seen Amazon grow to become the second most valuable company in America, with a net worth of $1.7 trillion. Bezos, who is currently one of the richest people in the world with a net worth of nearly $200 billion, said in an email to his employees that this decision comes as a result of his hopes to devote more “time and energy” to his other ventures.
“Being the CEO of Amazon is a deep responsibility, and it’s consuming. When you have a responsibility like that, it’s hard to put attention on anything else,” Bezos wrote.
Though he will soon no longer be CEO, Bezos will not be leaving Amazon entirely. Come quarter three he will take up a position as Executive Chair of the company’s board.
“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,” said Bezos.
William Klepper, academic director of executive education at Columbia Business School, said to Business Insider, “Non-executive chairman [means] they keep their nose in but their hands off of the business. In this case, when you use the term executive chairman of the board, it basically means I’m not going to keep my hands off the business. . . So in many ways [running the company is] a partnership now.”
According to Mary-Hunter McDonnell, associate professor of management at the Wharton School at the University of Pennsylvania, this means that new leadership does not equate to a new business strategy for Amazon. “When you see a CEO stepping into an executive chair role, it’s a signal that the board really wants to stick with the current strategy,” McDonnell told Business Insider. “It’s not the time to bring in a new transformative CEO.”
Soon-to-be-CEO Jassy is a Harvard graduate who has been a part of Amazon nearly as long as Bezos, having joined the company in 1997. Amazon Web Services, the subsidiary Jassy helped develop and lead, provides computing and cloud services for companies such as Netflix and McDonald’s as well as governments. AWS drives a large portion of Amazon’s profits, accounting for 13.5% of the company’s total revenue in the first quarter of 2020.
“Amazon Web Services is a powerhouse within the company, driving a lot of profitability,” Tim Hubbard, assistant professor at the University of Notre Dame’s Mendoza College of Business, told CNN. “Andy Jassy stepping into the CEO role at Amazon is a natural fit.”