Jeff Bezos
Credits: Wikimedia Commons

Jeff Bezos, the former world’s wealthiest person (point to Elon Musk) and the founder of Seattle-based multinational technology company Amazon, is set to step down as the CEO in the third quarter of 2021, the company announced during its Q4 earnings call on Tuesday. The 57-year old Bezos will transition to the role of executive chair of Amazon’s board of directors.

Bezos will be replaced by the 53-year old Andy Jassy, currently the head of Amazon Web Services, the company’s cloud-computing unit.

Tuesday’s announcement comes as a huge surprise, after Amazon reported record fourth-quarter sales that topped $100 billion for the first time. Revenue grew by 44% to $125.6 billion, while profits came to around $7.2 billion. Operating income increased to $6.9 billion in the fourth quarter, compared to $3.9 billion in Q4 2019. These record sales by Amazon can be attributed to the surge of online sales worldwide due to the restrictions and lockdowns enforced by the pandemic. 2020 was Amazon’s most profitable year ever, recording $386.1 billion in sales and $21.3 billion in profits. Net income in 2020 increased to $21.3 billion, or $41.83 per diluted share.

Bezos said in a statement, “If you do it right, a few years after a surprising invention, the new thing has become normal. People yawn. That yawn is the greatest compliment an inventor can receive. When you look at our financial results, what you’re actually seeing are the long-run cumulative results of invention. Right now I see Amazon at its most inventive ever, making it an optimal time for this transition.”

In an email to Amazon employees, Bezos revealed that he was excited about the transition and that he never “had more energy, and this isn’t about retiring.” He also revealed his intention to focus on new products, early initiatives, and “other passions” that include philanthropic giving, his Day One Fund, and Bezos Earth Fund, as well as other business ventures including The Washington Post and the private space firm Blue Origin. “I’m super passionate about the impact I think these organizations can have,” he said.

Bezos also expressed confidence on his successor Jassy, who founded Amazon Web Services in 2003. The cloud services division of Amazon has been one of its most profitable units – its net revenue has risen to $12.74 billion in Q4 2020. “Andy is well known inside the company and has been at Amazon almost as long as I have,” Bezos said. “He will be an outstanding leader, and he has my full confidence.”

This transition, however, does not end Bezos’ long association with the company he built from scratch. As chair of the board, Bezos would continue to remain “very involved” on the production of new products and in setting Amazon’s strategic direction. He would “stay engaged in important Amazon initiatives,” Bezos said.

Amazon is Bezos’ brainchild, founded in 1994 as an online bookstore in Bezos’ own garage. Today, it has grown on to become one of the largest names in online retail and a colossus with operations in streaming television and music, cloud computing, groceries, and more. It made Bezos the world’s wealthiest person for a good few years, with a net worth of $196 billion and 10.6% of Amazon’s outstanding shares.