SEATTLE — Amazon announced Tuesday that founder and CEO Jeff Bezos will be transitioning to a new role in the company, and the man in charge of the tech giant's web hosting service will take over.
Bezos will move to the role of executive chair in the third quarter of 2021, and Andy Jassy will become the tech company's new CEO, according to a statement from Amazon.
In an email to employees Tuesday, Bezos said he intends to focus his energies in his new role on new products and early initiatives.
"Being the CEO of Amazon is a deep responsibility, and it’s consuming," Bezos wrote in the email, which was posted publicly on the company's website. "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."
Bezos continued to say that this transition "isn't about retiring," and that he is passionate about the impact these organizations can have.
He also congratulated Jassy on the promotion and said, "he will be an outstanding leader, and he has my full confidence."
The news of Bezos stepping down from the empire he built that has grown to employ more than 1.3 million people spread quickly Tuesday afternoon. KING 5 spoke with Bill Carr, who is the former vice president of Digital Media at Amazon, launching Amazon Music, Prime Video, and Amazon Studios.
"I think it's bittersweet news," Carr told KING 5. "The bitter part is this the end of an era. The sweet part is, is that it's the end of one of the most successful runs of a business leader in perhaps the history of business."
Carr started at Amazon in 1999 and worked with Bezos, and Jassy, during his 15 years with the company.
"Andy's a shrewd operator, he manages... he always started off with lean teams, and was able to do more with less, and, you know, to manage a really tight ship, and he's going to be an amazing leader for all of Amazon," said Carr.
Carr also co-authored a book titled, Working Backwards, about his time at the tech giant. Watch the full interview with Bill Carr:
Jassy, who has kept a lower profile than Bezos, is a Harvard Business School graduate and joined Amazon in 1997. He is currently the CEO of Amazon Web Services, and is widely credited with boosting the unit to incredible heights.
"Amazon Web Services is really, a tech company into its own right," said Todd Bishop, who reports on tech for Geekwire in Seattle. "And it’s something that Amazon built essentially as a way of extending to other companies the cloud services it originally built for itself. And it’s an example of the kind of thinking that has led Amazon at large to become one of the most valuable companies in the world."
Among other things, Bishop described Jassy as a "real tech and business nerd," and one of Bezos' key lieutenants. Jassy has also bought into Seattle's new NHL Franchise. He will step into his new role as CEO this summer.
A University of Washington marketing professor called the announcement a seemingly well-thought out plan. He said it’s an ideal situation to transfer power at a time when business is booming.
UW Marketing Professor Jeff Shulman said he understands how unsettling the announcement can be. Shulman believes there may be a subtle shift in direction under Jassy’s leadership, with more emphasis on the Amazon you don’t see.
"I think with this announcement, this should actually put Seattle a bit at ease, because the leadership transition is to somebody who is been in Seattle for years, somebody who's built this business Amazon Web Services, and somebody who is likely to continue growth here in our region," said Shulman.
The leadership changes were somewhat buried in a press release from Amazon Tuesday announcing its financial results for the fourth quarter that ended on Dec. 31, 2020.
The company's net sales increased 44% in the fourth quarter of 2020 to $125.6 billion, compared to $87.4 billion in the fourth quarter of 2019.
For the full year overall, Amazon's net sales increased 38% to $386.1 billion in 2020, compared to $280.5 billion in 2019. The company's net income increased substantially for the year 2020 to $21.3 billion, compared to $11.6 billion overall in 2019.
Another headline for Amazon Tuesday is that it will pay $61.7 million to settle charges that it took tips from its delivery drivers.
The Federal Trade Commission announced that for more than two years, Amazon didn’t pass on tips to Amazon Flex drivers, even though it promised shoppers and drivers it would do so. The FTC said Amazon didn’t stop taking the money until 2019, when the company found out about the FTC’s investigation.
The settlement money will go to those drivers.