Running Amazon Became a Lot Less Fun Once Jeff Bezos Left
Reading Time: 4 minutesJeff Bezos Stepped Down as Amazon CEO Just in Time for the Gig to Become Miserable, Assessing Andy Jassy’s first two years., Amazon CEO Andy Jassy’s first two years: The job became a lot more miserable after Bezos left.
Almost immediately after Jeff Bezos handed Amazon to Andy Jassy in July 2021, the trouble began. The company had been soaring post-pandemic, bolstered by overwhelming interest in e-commerce and the cloud, but a return to in-person life and a broad tech drawback changed it all fast. As Jassy took over, Amazon’s share price plunged, customers started buying less, easy corporate deals became hard, and hard deals fell apart. While Bezos lived the good life, his anointed CEO dealt with the fallout.
Next month, Jassy will reach the two-year point in his bumpy run as CEO. He’s helped bring some stability to the company, but his record’s been marked by approximately 27,000 layoffs, a rush to streamline operations, slowing cloud growth, and questions about the company’s focus. Amazon stock is up 48 percent this year, but is down about 30 percent since Jassy took over. And if his first two years were a crucible, the next will be defining, as he’ll face mounting challenges while hoping Bezos doesn’t pull an Iger.
Here’s where things stand inside Andy Jassy’s Amazon.
After Amazon’s retail business grew 39 percent in 2020, it decided to double its fulfillment footprint in 24 months. The aim was to add capacity quickly in case pandemic buying habits kept up. When that hope didn’t materialize, Amazon was stuck with excess space and costs. ‘We knew we might be overbuilding,’ Jassy admitted late last year, but the company proceeded nonetheless. Rising inflation and an uncertain economy further complicated the decision, as people spent less freely on the site. Interest-rate increases then drove the market to demand maximum efficiency, leaving Amazon’s entire retail operation misaligned.
Responding to Wall Street, Jassy conducted deep layoffs and looked to slim operations across the business. Amazon soon made plans to sublease its excess warehouse space and sought to use its existing space better. It shifted from a national fulfillment model to a regional model, and many of those regions are now largely self-sufficient, capable of shipping you whatever you need without relying on another network of warehouses. The company also changed its website to help the efficiency push. ‘The first few nonsponsored results are going to be products already available in the local distribution center,’ Bernstein analyst Mark Shmulik told me, sounding impressed with the changes. ‘They’re actually tying inventory to how they’re displaying the results.’
With retail stabilizing, Amazon must now fend off new competitors capitalizing on the bargain shopping trend. Notably, Chinese retailers Temu and Shein are continuing to gain adoption in the U.S., with Temu alone reaching 74.1 million downloads, according Apptopia. Not all Temu users are active, but usage is soaring. These challengers are effectively bringing many of the made-in-China brands on Amazon directly to consumers at a lower price, though with worrying labor practices. Amazon will have to respond to avoid losing market share. In retail, there’s no such thing as a break.
In the zero-interest-rate era, companies would spend wildly on cloud services without much thought. ‘It wasn’t just capacity,’ said Shmulik. ‘It was value-added services like ‘Oh, I want the platinum SLA.” Amazon Web Services’ customers believed the good times would roll on, that growth was inevitable, and that extra space or higher levels of services were worth the cost. No longer. As interest rates rose, companies looked for places to cut, and CFOs began scrutinizing the fancier AWS packages. In many cases, they limited plans to increase spending or even cut back.
Alongside a pullback from bigger cloud customers, Amazon has struggled to keep growing as VC funding grew scarce and the startup economy slowed down. ‘It’s still a bit dry out there, aside from some pockets of A.I. investments,’ said Shmulik. ‘These digitally native tech startups are typically born on AWS, so you’re not seeing those dollars flowing.’
AWS growth slowed to 16 percent in this year’s first quarter, down from 20 percent last year. And it may slow further before it picks up. The company’s cloud services division will also have to work to keep its shine as competitors including Microsoft and Google rush to support A.I. AWS did counter in April with new tools to build generative A.I. applications in AWS. This fight is in its in infancy, though, and how Amazon fares could meaningfully influence the company’s trajectory.
Jeff Bezos had plenty of executives to pick from when considering his eventual replacement, and landed on Jassy. By selecting the technologist running AWS instead of someone with deep retail experience, Bezos was making a bet on the future. Jassy had been at the helm of Amazon’s most successful expansion (the AWS building in Seattle is called ‘re:invent’) and was best positioned to lead the company through necessary transformations in the future.
But Amazon under Jassy has been notably absent in the race to release new consumer generative-A.I. applications. Currently, there’s a document floating around the company with more than 60 employee-sourced ideas for ChatGPT-like uses. But Amazon is clearly behind, a surprise given its lead in voice computing with Alexa.
Amazon’s delay on ChatGPT-style tech underscores Jassy’s challenge. To reward Bezos’ faith in him, he’ll have to push forward with new experiments at a time when market is punishing excess spending. The temptation, currently, is to shut down experimental projects instead of spinning them up. And while focus is necessary for today’s Amazon, being timid to push ahead with the products could hold the company back in the long run.
Reference: https://slate.com/technology/2023/06/amazon-andy-jassy-ceo-two-years-jeff-bezos.html
Ref: slate
MediaDownloader.net -> Free Online Video Downloader, Download Any Video From YouTube, VK, Vimeo, Twitter, Twitch, Tumblr, Tiktok, Telegram, TED, Streamable, Soundcloud, Snapchat, Share, Rumble, Reddit, PuhuTV, Pinterest, Periscope, Ok.ru, MxTakatak, Mixcloud, Mashable, LinkedIn, Likee, Kwai, Izlesene, Instagram, Imgur, IMDB, Ifunny, Gaana, Flickr, Febspot, Facebook, ESPN, Douyin, Dailymotion, Buzzfeed, BluTV, Blogger, Bitchute, Bilibili, Bandcamp, Akıllı, 9GAG