Amazon’s Post-Bezos Experience Didn’t Go Exactly As Planned
Amazon CEO Andy Jassy speaks at the GeekWire Summit in Seattle on October 5, 2021.
david ryder | Bloomberg | Getty Images
When Amazon announced just over two years ago that founder and then-CEO Jeff Bezos would hand over the helm to former cloud boss Andy Jassy, few investors or analysts reacted with much concern.
Jassy, a close confidant of Bezos, was known as an Amazon lifer and a famous figure within the company and across the industry because he launched Amazon Web Services, which has become one of the most valuable companies in the world. Wedbush analysts all but yawned at the move, saying the transition would likely be “seamless and largely inconsequential”.
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Unfortunately for Jassy, his short tenure at the helm has been all too eventful.
Since Jassy officially took over from Bezos in July 2021, Amazon has had its most turbulent time since the dot-com crash. Last year marked its slowest year for revenue growth as a public company, and Jassy was forced to guide Amazon through a series of cost-cutting measures that no one predicted would be necessary when business was booming during the covid pandemic.
Amazon shares have plunged 44% since July 5, 2021, Jassy’s first day as CEO. And on Monday, Jassy said the company was cutting an additional 9,000 jobs, adding to the 18,000 layoffs announced in January. Although the cuts represent only a small percentage of Amazon’s workforce, they still represent a shocking turning point for a company that had been in an uninterrupted growth phase for nearly 25 years.
“Given the uncertain economy we reside in and the uncertainty that exists for the near future, we have elected to be more streamlined in our costs and workforce,” Jassy wrote in an email to employees. .
Much of Jassy’s unfortunate situation can be attributed to bad timing – historically high inflation prompted the Federal Reserve to raise rates, crippling growth in the US tech sector. But whether it’s bad luck, his own missteps, or a combination of the two, Jassy holds an unenviable position as the second-largest CEO in Amazon history.
Bezos, his predecessor, transformed Amazon from a bookseller into a retail, cloud computing and advertising giant that became known for its inventive, startup-like atmosphere. Under Bezos’ watch, the company developed breakthrough inventions such as the Kindle e-reader and Echo smart speaker, and invested in new verticals such as original content, healthcare and brick-and-mortar grocery stores. .
So far, the Jassy era has been all about belt-tightening and retrenching some of Amazon’s more experimental businesses.
Over the past year, Jassy has cut expenses across the company. Many unproven bets, like Amazon’s Scout delivery robot, a virtual tour service, the Care telehealth program and a video-calling device for children have been scrapped. It made the decision to close all of its 4-Star, Pop Up and Books stores and earlier this year announced that Amazon would close some Fresh supermarkets and Go convenience stores without a cashier. Drone delivery, one of Bezos’ pet projects, is struggling to get off the ground as it also faces cost cuts.
The pandemic-driven e-commerce boom has pushed Amazon to double its physical footprint between 2020 and 2022. Stock has soared, along with headcount. But as the economy reopened and online sales stagnated, Amazon found itself saddled with more facilities than it could effectively use and ultimately decided to close, cancel or delay. the opening of many new warehouses.
Earlier this month, Amazon suspended construction of the second phase of its sprawling new campus in Arlington, Va., dubbed HQ2. Other construction projects in Nashville, Tennessee and Bellevue, Wash., have also been put on hold, in part because much of Amazon’s workforce has been working remotely since the pandemic.
Jassy is under immense pressure to prove he can control his spending. But in order to rekindle the excitement that Bezos has instilled in Amazon’s culture, he must ultimately find new engines of growth.
In its fourth-quarter earnings report, Amazon barely turned a profit and the company issued a disappointing first-quarter guidance, with revenue growth expected to be stuck in the mid-digits.
That’s not exactly what Bezos had in mind when he briefed employees in early 2021 on the upcoming CEO transition.
“Amazon couldn’t be better positioned for the future,” Bezos wrote at the time in a letter to staffers. “We’re firing on all cylinders, just like the world needs us to be. We’ve got things in the works that will continue to amaze.”
SHOW: Amazon cuts another 9,000 jobs