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Feb 5, 2021

Amazon is getting a new CEO. Will that mean big change or status quo?

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For the last 10 years, Amazon has used its big profits from cloud computing and online advertising to invest in things like TV production and smart microwaves.

Amazon’s founder and CEO, Jeff Bezos, announced this week that he’s going to become executive chairman of the company, and the new CEO in July will be Andy Jassy, now the head of Amazon Web Services. Amazon is 26 years old and obviously is massive and has ideas to do everything from package delivery and television production to smart microwaves and artificial intelligence. And its huge and incredibly profitable cloud business. Amazon’s ambition and reach are legendary.

But with Bezos taking on a new role, could that change? I spoke with Brad Stone, a senior executive editor for Bloomberg. He’s written one book on Amazon and has another coming out this spring. I asked him if Amazon might start to focus more on the gold mine of its cloud business. The following is an edited transcript of our conversation.

Brad Stone: Amazon actually has two of those gold mines. You mentioned one, AWS, and the other one is advertising. And it’s been this quiet force gobbling up market share and online advertising. And for the last 10 years, its investors have been wholly onboard with Amazon not returning that money to shareholders, not showing a big profit, although they’ve been getting better in that regard, but investing and inventing new things. To the extent that its shareholders continue to allow that to happen, I think Amazon will continue to do it. Now, Jeff Bezos, he’s going to continue to be active in the big decisions and working on new projects. And executive chairman is a role that carries some meaning. He’s still going to be Andy Jassy’s boss.

Molly Wood: In many ways, Andy Jassy seems formed in the same mold as Jeff Bezos. And yet there are real critiques about the company’s treatment of its workers, its wages, its approach to climate, not even withstanding antitrust. Do we have a sense of whether Jassy might be more responsive to some of those critiques?

Stone: Right, are we going to see a softer, gentler Amazon?

Wood: Yeah, like a Tim Cook to Steve Jobs?

Stone: In some respects, maybe. I mean, Jassy is, while he’s sort of cleaved from Jeff Bezos’ rib in a lot of ways, he’s also different. I mean, he’s more politically active. At the same time, Amazon, AWS, under Andy Jassy sold its face-recognition software to law enforcement agencies and only paused for a year when the [Black Lives Matter] movement became very loud and vocal. So I don’t suspect at first much will change, particularly with Bezos [being] a very loud voice on the board.

Wood: With a lot of sentiment changing, is that not a good thing? Should Jassy be more open to change? Will shareholders have less tolerance for business as usual?

Stone: I think they’re going to have to start listening more to the voices. Not only of their front-line employees in the warehouses, who I do think have some real grievances, particularly amid the pandemic. But to the contractor workforce, that invisible constituency, who drives Amazon vans and drops off our packages. Like a lot of companies, Amazon indulges itself in this contractor workforce, where the health care protections, the $15-an-hour wage protections don’t exist. And so I think, yes, I mean, they’re going to increasingly, if they want to get to that next level of growth, have to listen to some of these concerns.

Blue Origin founder Jeff Bezos speaks after receiving the 2019 International Astronautical Federation Excellence in Industry Award during the the 70th International Astronautical Congress at the Walter E. Washington Convention Center in Washington, D.C., on Oct. 22, 2019.
Amazon CEO Jeff Bezos selected Andy Jassy to replace him at the helm of the company, and Bezos will take the title of executive chairman. (Mandel Ngan/Getty Images)

Related links: More insight from Molly Wood

I recommend reading Brad Stone’s piece this week on the shift at Amazon and the headwinds that Jassy might face while Bezos is goofing off with going to space and maybe a little climate change funding. At “Marketplace Tech,” we have been noting the somewhat slow pace of those Bezos Earth Fund grants and the lack of information about where they might go in the future, so I’m looking forward to seeing what more happens with that.

Anyway, I also thought Stone’s piece was interesting because it notes that some of the things Bezos has been trying to do on the side, like run the Washington Post, have actually caused problems for Amazon. Certainly, with the Trump administration, which most likely spiked the company’s bid for a $10 billion contract with the Pentagon that ended up going to Microsoft. But it also caused India’s prime minister, Narendra Modi, to decline a meeting with Bezos because of coverage about him in the Post. And then, Stone notes, there’s Elon Musk kicking all kinds of rocket ships in the space race while Blue Origin kind of also does space.

Meanwhile, not a lot of signs of a kinder, gentler Amazon just yet. This week, it emerged that the company plans to install cameras in all its delivery vehicles that use AI to identify possible safety hazards and warn drivers. But drivers say they’re obviously worried about privacy and that the cameras will mostly be used as taskmasters or to punish them for minor infractions. Motherboard reported Thursday that Amazon is forcing workers into 10-hour graveyard shifts called “megacycles” that start at 1 a.m. and end sometime around lunchtime, offering them the choice between taking the longer shifts or losing their jobs. And after a complaint from the Federal Trade Commission that Amazon was stealing tips from its so-called Flex drivers — contract workers who make Amazon deliveries in their own vehicles — the company said it would pay out just shy of $62 million to those workers but did not admit wrongdoing.

And, of course, Andy Jassy did greenlight selling Amazon’s facial-recognition technology to law enforcement before the company reversed course, despite real concerns over discrimination and mistaken identity. Several cities have since banned the technology or its use by law enforcement. In a PBS documentary last year, Jassy said unequivocally that he’d happily sell facial-recognition tech to foreign countries as well, as long as it was allowed by U.S. law. Hopefully there’s more nuance in his stance now, or in the coming months and years.

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The team

Molly Wood Host
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