Updated at 8:28 p.m. ET
Amazon founder Jeff Bezos will step down as the company's chief executive officer this summer, after more than a quarter-century at the helm of the retail, logistics and tech powerhouse.
Bezos will become Amazon's executive chairman and remain its biggest shareholder, the company said on Tuesday. He will hand over the CEO reins to Andy Jassy, the head of Amazon's cash-cow cloud computing division.
Bezos has propelled the online bookseller he started in his Bellevue, Wash., garage in 1994 into a behemoth worth $1.7 trillion employing over 1.3 million people, with physical stores, delivery trucks, movies, Internet-connected cameras, a cloud business that props up the CIA and enough paying subscribers to populate the ninth-largest country on Earth.
Jassy has been at Amazon for much of its existence and is one of Bezos' most trusted lieutenants. He served in the coveted role of the CEO's "shadow" technical — a role in which he accompanied Bezos to all his meetings to learn the business — in 2003. After writing the original document that became the Amazon Web Services business plan, he has run the division since it formally launched in 2006.
"As much as I still tap dance into the office, I'm excited about this transition," Bezos said in a letter to employees, announcing the end of his 27-year run. He said he planned to spend more time focused on philanthropy and other outside ventures.
"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," he wrote. "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."
Cloud computing is Amazon's biggest profit center, even as the company continues to profit tremendously from pandemic-fueled online shopping. On Tuesday, Amazon reported yet another record-setting quarter, with sales during the holiday season topping $125 billion. AWS alone raked in $3.6 billion in operating profit — half of the company's total.
In recent years, Bezos had already largely stepped back from day-to-day role managing Amazon's business, focusing on longer-term projects at the company and his outside projects including rocket company Blue Origin.
He did take a more hands-on approach during the early months of the pandemic last year, however, as demand for deliveries soared but also tested Amazon's ability to keep up. AWS, which sells cloud computing services to other companies, also experienced surging demand as many people and businesses realigned for remote work.
"Jeff will continue to stay not only very involved, but have his fingerprints on a lot of areas of product development and innovation," Amazon Chief Financial Officer Brian Olsavsky told reporters on Tuesday. "So Jeff is really not going anywhere, it's more of a restructuring of who's doing what."
For Jassy, moving up to the CEO role means taking on some of Amazon's most pressing challenges. That includes a burgeoning labor movement: Workers in Alabama are about to vote on whether to become the company's first unionized warehouse in the U.S., while white-collar staff and engineers at its headquarters in Seattle have pushed the company to get serious about addressing racial justice and the climate.
Amazon is also under growing the scrutiny from regulators and lawmakers in the U.S. and Europe who worry about its market dominance. Last summer, Bezos faced his first congressional grilling as part of the House Democrats' investigation that concluded that Amazon, Google, Facebook and Apple are all monopolies. Now it will be up to Jassy to defend the company from critics who say it should be broken up.
Tuesday's announcement also came on the same day as news that Amazon would pay over $61.7 million to settle the Federal Trade Commission's charges that the company withheld some tips of its Flex delivery drivers' over two and a half years.
Editor's note: Amazon, Apple, Facebook and Google are among NPR's recent financial supporters.
MARY LOUISE KELLY, HOST:
Amazon's Jeff Bezos is stepping down as CEO of the company he founded almost 30 years ago. He will transition to executive chairman. He will focus on new products and early initiatives. In his time at the helm of Amazon, it has grown and grown from modest online bookseller to retailing behemoth and one of the most powerful companies in the world. I need to note that Amazon is one of NPR's financial supporters. And I want to bring in NPR's Alina Selyukh.
ALINA SELYUKH, BYLINE: Hello, hello.
KELLY: So why is he stepping aside? What does Jeff Bezos say?
SELYUKH: So he's saying that he is shifting to the role of executive chairman. So it is accurate to say he's stepping down, but he's not stepping away by any means. And he has already largely stepped back from day-to-day managing work in favor of big-picture planning. And now, he, you know, he says he wants to focus more on these long-term passion projects, like his rocket company, Blue Origin, The Washington Post, which he owns, and philanthropy work. Today's timing was earnings. And so Chief Financial Officer Brian Olsavsky had to talk to reporters. And he was asked about this. And he basically said Bezos is not going anywhere, it's just a reshuffling of who's doing what.
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BRIAN OLSAVSKY: Jeff will continue to stay, you know, not only very involved, but very - you know, have his fingerprints on a lot of areas of product development and innovation. And of course, you know, he remains our largest individual shareholder.
SELYUKH: To quote Bezos himself, he wrote to employees today, quote, "as much as I still tap dance into the office, I am (ph) excited about this transition." He later said that being the CEO of Amazon is a deep responsibility and it is quite consuming. He's looking forward to expanding into all of these other projects he's got going on.
KELLY: I love that image of Jeff Bezos tap dancing into (laughter) his office...
SELYUKH: Into the office? (Laughter) Yes.
KELLY: ...At Amazon. Who will be tap dancing into the office in his place? Who's going to be the next CEO?
SELYUKH: (Laughter) His name is Andy Jassy. He's the head of Amazon's cloud computing division. This is Amazon Web Services, Amazon's biggest cash cow, biggest profit center. And Jassy is the person who shaped that company. Most famously, this is the cloud business that props up the CIA. It is by far the biggest cloud company out there. Jassy is also a big investor in Amazon. He has been there a long time. He's one of Bezos' longest-serving trusted lieutenants.
KELLY: Hmm. And what are going to be the biggest challenges he will face as CEO?
SELYUKH: Right. The timing is interesting. Next week, Amazon faces the first major big labor battle in the U.S. On Monday, Amazon workers in Bessemer, Ala., are starting to vote on whether to join a union, which could create Amazon's first unionized warehouse in America. So that's one big thing. Then, like all tech companies, Amazon is facing scrutiny for its scale, its power. Just today, actually, Amazon agreed to pay over $60 million to settle charges by the Federal Trade Commission, which is accusing Amazon of pocketing - essentially pocketing tips that were meant for delivery drivers.
And, you know, big picture, to your point earlier, Amazon has grown and grown into all of these different aspects of our lives. It's a company now worth almost $2 trillion.
SELYUKH: It employs 1.3 million people globally. It's growing very fast. It influences people's lives in so many ways. And how does that saying go, right? With great increasing power comes great increasing responsibility. I'm sorry about that (laughter). But the question is, you know, whether the American government or any other government might decide to hold Amazon more accountable for all its influence and power. And the new CEO is the person who will have to address that.
KELLY: NPR's Alina Selyukh, I think quoting from "Spider-Man" there, if I'm...
KELLY: ...(Laughter) Not mistaken. Thank you, Alina.
SELYUKH: Thank you. Transcript provided by NPR, Copyright NPR.