The news was a bombshell in the world of tech and investment. After nearly 27 years at the head of Amazon, Jeff Bezos has just announced that he will be stepping down as CEO at the end of the first half of 2021.
Jeff Bezos chose to announce this at the time of the announcement of Amazon’s 2020 results.
It is always easier to announce bad news (for investors) after having announced the good news.
The good news is that Amazon had an exceptional 2020 year. The coronavirus pandemic has benefited the revenues of all the GAFAs, and Amazon is no exception. The company founded by Jeff Bezos had revenues of $386 billion in 2020, an increase of +38% compared to the fiscal year 2019.
The figures are dizzying. To replace him at the head of Amazon, Jeff Bezos has chosen one of his closest collaborators. Indeed, it is Andy Jassy, the current boss of the very profitable AWS (Amazon Web Services) entity, who will replace him as CEO of Amazon.
Jeff Bezos leaves to Andy Jassy a company at the top, but facing significant challenges
Jeff Bezos won’t go too far, for the time being, as he will remain executive chairman of the board of directors. A way for him to ensure the best possible transition with his successor, to reassure investors, but also to relieve himself of the daily management of Amazon to focus on the group’s major orientations.
The richest man in the world leaves Andy Jassy a company with a market cap of nearly $1.7T and a dominant position in many key technology sectors for years to come. Jeff Bezos is also leaving at a time when more and more political actors and regulators are attacking the GAFA in general, calling for greater control and eventual dismantling.
Andy Jassy will have his hands full dealing with the thorny issue of the possible attack by anti-trust authorities against Amazon in the months and years to come.
Jeff Bezos’ decision came as a surprise to everyone. Towards the end of his letter, he gives a glimpse of how he plans to spend his time once he leaves his position as CEO:
“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 organizations can have.”
Jeff Bezos will be able to dedicate himself to the ultimate goal of his life
These few lines allow us to understand the first big reason why Jeff Bezos takes a step back. Jeff Bezos has always been passionate about space. The great goal of his life is to colonize space. He already said this during his graduation speech in high school in 1982.
Since then, he has never lost sight of the big goal of his life. It is not for nothing that he founded Blue Origin in 2000, and that he sells $1 billion worth of Amazon shares every year to finance his life’s project. Jeff Bezos must have noticed that Blue Origin was falling behind his great rival, SpaceX. SpaceX is led by Elon Musk. A merciless battle is looming between the two richest men on the planet to see who will first succeed in colonizing space and reach Mars.
Until now, Jeff Bezos used to spend a few Wednesdays a month and his weekends in the premises of Blue Origin near Seattle. This was not enough for him. He will be able to devote himself fully to Blue Origin from the summer of 2021. His initial objective will be to send humans into space before developing space tourism from his New Shepard rockets.
Once these first projects are successful, Jeff Bezos will be able to think about really realizing his life’s dream of colonizing space.
The bad image of Jeff Bezos was starting to hurt Amazon
Jeff Bezos bought The Washington Post in 2013. His desire to preserve the editorial line of the newspaper had earned Jeff Bezos much criticism from former U.S. President Donald Trump. It probably even cost Amazon the Pentagon’s $10 billion JEDI mega-contract for equipment.
This misadventure probably also convinced Jeff Bezos to step down. His somewhat tarnished image was harming Amazon.
This brings me to the second big reason why Jeff Bezos is stepping down as CEO of Amazon. Jeff Bezos can see that his divisive personality could be detrimental to Amazon in the months and years to come in the event of an anti-trust lawsuit, for example. By leaving his position as CEO, Jeff Bezos will take the pressure off.
Jeff Bezos follows in the footsteps of Bill Gates who left his position as CEO of Microsoft in 2000, leaving the place to his friend Steve Ballmer. The antitrust cases that affected Bill Gates had greatly tarnished his image. For the good of Microsoft, Bill Gates had decided to retire in the same way as Jeff Bezos does today.
Seeing Amazon employees demonstrating in front of his Washington home with a guillotine, to denounce the social conditions of employees while his assets are breaking records, obviously had to weigh in Jeff Bezos’ decision.
Jeff Bezos will seek to have his image associated with more consensual activities
A bad image is associated with Jeff Bezos. Since 2013, Jeff Bezos has been trying to fight against this. We all remember the memo distributed to his close employees in 2013. This memo was intended to restore Amazon’s image. Jeff Bezos did not succeed. This is something that touches him deeply because Jeff Bezos believes that a company should be loved and not just be successful.
In his memo, Jeff Bezos cited Disney and Apple as examples, and Goldman Sachs and Exxon Mobile as a counter-example.
So Jeff Bezos’ idea is to devote himself to more consensual activities.
By entering the world of philanthropy, Jeff Bezos hopes to achieve the same result as Bill Gates. Bill Gates is now more often associated with his philanthropic activities than he is with Microsoft, from which he has largely detached himself. The creation of the Bezos Day One Fund is a perfect example of this.
The $2 billion Bezos Day One Fund aims to promote education and help the homeless. The first free private school opened its doors in September 2020. To go even further, and counter-criticism that Amazon was a big polluter, Jeff Bezos created another foundation. This is the Bezos Earth Fund which aims to support projects to fight global warming.
Jeff Bezos promised to invest $10 billion of his fortune in the Bezos Earth Fund. In November 2020, Jeff Bezos himself announced on Instagram the names of the first 16 beneficiaries who will receive a total of $791 million. For its part, Amazon will independently contribute $2 billion through its own Climate Pledge Fund to finance sustainable technologies for decarbonization.
As you can see, Jeff Bezos is ready to invest massively to restore his image, but also to achieve his life’s goal: to colonize space. These two major reasons have led him to leave his position as CEO of Amazon. But rest assured, Jeff Bezos will not give up his company completely overnight.
Jeff Bezos remains involved in numerous strategic projects at Amazon that should allow the group to aim even higher. The difference is that it will be up to Andy Jassy to take these projects to the next level and be in the light. A way for Jeff Bezos to be forgotten little by little to restore his image.
It’s hard to know if it will work as well as it did for Bill Gates, but it’s the bet Jeff Bezos is taking for the years to come.