Jeff Bezos Stepping-Down as CEO has to be the news of the week. Jeff Bezos, the founder of Amazon.com Inc., is stepping down as chief executive after a tumultuous 2016 for the online retailer and its CEO. Citing people familiar with the matter, The Wall Street Journal reported that Mr. Bezos would remain at Amazon as chairman of its board. Last year, he hired a new chief executive officer when he recruited former J.P. Morgan Chase & Co banker Jeff Wilke to take over for Mr. Bezos as a top manager of one of the world’s biggest companies by market value.
Bezos retires from his job on July 5, but his decision was made clear to employees on Tuesday at an emotional all-hands meeting in Seattle, the newspaper said. The move would end Bezos’ 20-year run as the leader of Amazon and leave him with a mixed record of successes and failures under his leadership. The company rode years of breakneck growth partly due to software innovations devised by its founder. But it has also suffered some high-profile launches that didn’t catch on with shoppers, such as its line of smartphones and its Fire tablets.
In March, the Journal reported that Mr. Bezos had told associates he intended to remain CEO for another five years because he felt there were ample opportunities ahead for Amazon Web Services and other businesses. This year, Amazon committed and took up another position on the company’s board effective that day, according to an email sent to employees Wednesday afternoon.
How much did Amazon grow in business with Jeff Bezos as CEO?
Amazon’s success under Jeff Bezos has been nothing short of phenomenal. In 2015, Amazon reached $107.0 billion in annual revenue, which is more than double the revenue from 2009 of $48.1 billion. Even though the stock price has doubled since 2012, it remains significantly below its all-time high just a few years ago. The growth is due in part to new sectors that Mr. Bezos launched such as Kindle and entertainment, but also because of Amazon Web Services (AWS). AWS generated about 10% of overall revenues in 2016, is seen by many observers as a key driver for future earnings-per-share gains long term.
Although in the past 20 years, Amazon has grown and revolutionized how we shop online, some would argue that since 2016, Mr. Bezos’ focus began to fall off. According to one source, he had given up his key role in daily operations by hiring the new CEO and turning over many of his responsibilities to Wilke who now oversees many aspects such as selecting products for the company’s warehouses and deciding what cities get distribution centers. The New York Times also reported that financial analysts had criticized Amazon for its lack of innovation: “What happened with this last quarter is a classic case–the stock fell because they came out.
How Does This Decision Affect The Amazon Stock?
The stock of Amazon could experience a fluctuation when Bezos retires from his job on July 5. But ultimately, the CEO of Amazon is not as important to its shareholders and customers today as it was 20 years ago when he founded the company.
Given that Jeff Bezos may have questionable on-the-ground knowledge about managing projects at a granular level or might have much exposure to new products launching today (including physical retail stores), his decision could be viewed in retrospect with the benefit of hindsight as a wise one? And while he may no longer oversee what products are sold online or where distribution centers are built, his overall vision for Amazon’s future is likely not going to change.
In his final letter to shareholders, Jeff Bezos highlighted a critical concept that has guided Amazon’s success: “You have to create more than you consume.” According to the CEO, this is what led him and other employees at Amazon.
“Your goal should be to create value for everyone you interact with,” he said in the passage which also defended allegations from delivery drivers who work for competitors like UPS or FedEx Corporation, claiming they are not getting paid enough.