BREAKING — Amazon CEO Jeff Bezos will become executive chair of the massive online retailer in the third quarter and be replaced by his longtime lieutenant, AWS CEO Andy Jassy.
The bombshell announcement on Tuesday came as Amazon reported its fourth-quarter financials.
“When you look at our financial results, what you’re actually seeing are the long-run cumulative results of invention,” Bezos said in a statement. “Right now I see Amazon at its most inventive ever, making it an optimal time for this transition.”
Amazon saw net sales jump 44% to $125.6 billion in the fourth quarter, powered by a busy holiday shopping season that drove more business online as customers avoided retailers amid the COVID-19 pandemic. Net income more than doubled to $7.2 billion, in contrast to $3.3 billion the quarter one year prior.
For the full year, Amazon logged $386.1 billion in net sales, a 38% increase over 2019’s $280.5 billion total.
While sudden, Bezos’ departure and Jassy’s pending ascension to the CEO job has been subject of some speculation for years. AWS is seen as a key driver of Amazon’s profitability, with its higher-margin cloud services helping offset aggressive pricing by Amazon in its e-commerce business.
Last year, that speculation percolated ever higher following August’s retirement announcement of Amazon’s retail business chief, Jeff Wilke, a move that took one major successor possibility off the table.
AWS had a $46 billion revenue run rate in 2020, a rise of 29% year-over-year, Jassy said during the company’s re:Invent conference in December. The division benefited greatly from the pandemic as enterprises worldwide scrambled to adopt work-from-home policies and associated technologies for collaboration, secure networking and other areas.
“So many of those enterprises have gone from talking to having a real plan,” Jassy said during the conference. “When you look back at the history of the cloud, it will show that the pandemic accelerated adoption of the cloud by several years.”
Jassy joined AWS in 1997 and founded AWS in 2003. Since then, he has built the division into a cloud computing powerhouse known for delivering a firehose of new services each year. He makes a logical choice for Bezos’s successor, said R “Ray” Wang, founder and CEO of Constellation Research.
“The company is about hard work, doing impossible things, and ensuring the customers gets choice, value and innovation,” Wang said. “Jassy deserves the job, and he’s well earned it.”
Reporting in progress — full story to follow.
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