Amazon CEO Jeff Bezos is stepping away from the big chair, with the founder ceding the chief executive role to Andy Jassy later this year. The transition news was shared as part of Amazon’s financial results for Q4 2020 ending December 31 of last year, where net sales for the retail behemoth surged by 44-percent year on year, and operating income leapt by $3 billion to a whopping $6.9 billion.
That’s quite the high to go out on. Bezos will be moving to the role of Executive Chair, Amazon has confirmed, sometime in the third quarter of 2021. At that point, Andy Jassy will take over as Amazon CEO.
Currently, Jassy is CEO of Amazon Web Services (AWS). Indeed, he’s been the lead there since AWS was first created; before that, he held several leadership roles at Amazon, having joined the company in 1997.
In a letter to employees published by Amazon, Bezos describes the decision to exit the CEO seat as being one of time prioritization. “Being the CEO of Amazon is a deep responsibility, and it’s consuming,” he explains. “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. 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.”
Nonetheless, it’s an unexpected shift from Bezos, who has taken Amazon from its uncertain beginnings to its current status as a retail behemoth. In 2020, that strength particularly showed its worth during the pandemic, with Amazon’s sales success undoubtedly owing no small amount to a surge in online shopping as people attempted to socially distance. Nonetheless, Amazon insists that the coronavirus has meant extra costs for it, too.
“Since the start of the COVID-19 pandemic, Amazon has incurred more than $5 billion in operational costs on behalf of independent businesses selling in Amazon’s store, and expects to invest billions more through 2021,” it said today. “In 2020, Amazon increased square footage across its fulfillment and logistics network by 50%, dedicated 60% of fulfillment center capacity to seller products, and postponed annual selling fee adjustments until June 2021.”
Still, the numbers speak for themselves. In Q4 2020, net sales rose 44-percent, to $125.6 billion. That’s compared to $87.4 billion in Q4 2019. Operating income rose from $3.9 billion to $6.9 billion. Net income rose to $7.2 billion, versus $3.3 billion a year previous.
For the full year 2020, meanwhile, net sales increased 38-percent over 2019. That meant $386.1 billion in sales, and $22.9 billion in operating income. Net income rose to $21.3 billion, almost double 2019’s figure.
Looking ahead, Amazon expects Q1 2021 net sales to land between $100 billion and $106 billion, which would mean up to a 40-percent increase from Q1 2020. Operating income is likely to reach between $3 billion and $6.5 billion, compared to $4 billion in Q1 2020, assuming around $2 billion in COVID-19 related costs.