- Jeff Bezos is shifting his role in Amazon from CEO to executive chair of the board.
- AWS CEO Andy Jassy will fill Amazon’s CEO role.
- Amazon reported a stellar Q4 that once again outperformed projections.
Amazon’s Q4 call to investors was packed to the gills with big news. The biggest announcement was that Amazon Founder and CEO Jeff Bezos is moving into a different role, and Andy Jassy — currently the CEO of AWS — will be filling Bezos’s shoes. Also in the call, Amazon CFO Brian Olsavsky reported a strong fourth quarter that brought in $125.6 billion in net sales, a number that exceeded the company’s guidance of $112 – $121 billion.
For Amazon, growth seemed to be the main theme of 2020. The company closed out the year with $386.1 billion in net sales, a 38% year-over-year increase from 2019. It also expanded its square footage by 50% year-over-year and added around 500,000 employees to its workforce — 175,000 of which were added in Q4 alone.
Much of Amazon’s growth — especially in terms of capacity — has been fueled by the pandemic. There’s a lot of uncertainty stemming from pandemic conditions and how those will affect retail throughout 2021. While Amazon might choose to slow its capacity plans, Olsavsky told one investor that expansion would continue in 2021 but didn’t note any specifics.
“Obviously we had a large investment last year,” said Olsavsky. “…We’re still working through our plans for 2021…. There’s a lot of question as to the continuation of COVID conditions comping against prior-year sales.. On transportation, we made large investments in our transportation network in 2020. That work’s not done yet. We have a lot of continued expansion, so we see that over definitely through 2021. I can’t quantify it right now.”
Although COVID-19 catalyzed significant growth for Amazon, it also came with substantial costs. Amazon spent $11.5 billion in COVID-related costs in 2020, $4 billion of which was spent in Q4. The company forecasts that they’ll need to spend an additional $2 billion in COVID-related costs in the Q1 of this year.
In the biggest news of the call, Olsavsky went on in the Q&A session to talk more about Bezos’s transition from CEO, re-assuring investors that Bezos will continue to play a large role in the company.
“And I will reiterate that Jeff is not leaving, he is getting a new job,” said Olsavsky. He’s going to be executive chair of the board — super important role. The board is super active and important in Amazon’s success story.”
Regarding the company’s soon-to-be new CEO Andy Jassy, Olsavsky remarked: “Andy has been here since 1997. He is not only a visionary leader, but he’s also a strong operator, as I said, and he’s got a great track record of developing multiple things and businesses within Amazon. Not the least of which is AWS, which is arguably the most profitable, important technology company in the world. So that’s just a flavor on the insight on how it works. We’re very happy to see both Jeff and Andy get a new perspective.”