Jeff Bezos has announced he’ll stand down as chief executive of Amazon within the third quarter of 2021. The founding father of the web retail behemoth will hand the reins to Andy Jassy, who currently leads Amazon’s cloud computing wing.

The announcement comes after an enormously successful 2020 for Amazon despite (or perhaps due to) the COVID-19 pandemic, with operating cashflow up 72% from the previous 12 months to US$66.1 billion, and net sales increasing 35% to US$386.1 billion.

Amazon has its share of detractors, with critics highlighting concerns around working conditions, tax minimisation, anti-competitive practices and privacy. But its enormous size and continuing phenomenal growth make it a force to be reckoned with.

How did Amazon get to this position, and what does the long run hold under recent leadership?

How it began

Almost 27 years ago, in 1994, Bezos left his job as a senior vice-president for a hedge fund and commenced a web based bookstore in his garage. At the time, using the web for retail was in its infancy.

Bezos decided that books were a super product to sell online. Originally the brand new business was named Cadabra, but Bezos soon modified it to Amazon and borrowed US$300,000 from his parents to get things off the bottom.



Books proved popular with growing numbers of online buyers, and Bezos began so as to add other services to the Amazon inventory – most notably e-readers, tablets and other devices. Today Amazon predominantly makes its revenue through retail, web services and subscriptions.

The rise and rise of Amazon

Amazon is now certainly one of the most dear corporations on the earth, valued at greater than US$1.7 trillion. That’s greater than the GDP of all but 10 of the world’s countries. It’s also the biggest employer amongst tech corporations by a big margin.

The key to Amazon’s dominance has been constant expansion. After moving into e-readers and tablets, it prolonged more broadly into technology services.

The expansion has not yet stopped, and Amazon’s product lines now include media (books, DVDs, music), kitchen and dining wares, toys and games, fashion, beauty products, gourmet food and groceries, home improvement and gardening, sporting goods, medications and pharmaceuticals, financial services and more.

More recently Amazon has expanded into bricks-and-mortar, heralded by its purchase of the Whole Foods chain in 2017, the creation of its own high tech stores similar to Amazon Go, and its sophisticated distribution and delivery services similar to Amazon Prime.



Amazon has develop into increasingly vertically integrated, meaning it not simply sells others’ product but makes and sells its own. This gives the corporate a position of maximum market dominance.

Amazon has come under fire over working conditions in its warehouses and shipping centres.
Doug Strickland / AP

Criticism

Amazon is hugely popular with customers, but has attracted criticism from supplier advocates, employees unions and governments.

Industrial relations matters, similar to fair wages, unsafe work practices and unrealistic demands, appear probably the most common area of concern. A 2019 UK report found:

Amazon haven’t any policy on living wage and make no mention of wages being enough to cover employees’ basic needs of their supplier code.

Other concerns relate to alleged unsafe working conditions and “whistleblower” policies.

In March 2020, as COVID-19 began to take hold, employees claimed they were fired for voicing concerns about secure working conditions. Amazon vice chairman and veteran engineer Tim Bray resigned in solidarity and nine US senators issued an open letter to Bezos, in search of clarity across the sackings.

More general criticisms of the corporate culture have surfaced through the years, regarding insufficient work breaks, unrealistic demands, and annual “cullings” of the staff – known as “purposeful Darwinism”.

Another strand of criticism pertains to Amazon’s market size and antitrust laws. Antitrust laws exist to stop big corporations creating monopolies. Amazon presents a challenge, because it is a manufacturer, a web based retailer, and a marketplace where other retailers can sell products to consumers.

Privacy concerns have also plagued Amazon products like Echo smart speakers, Ring home cameras, and Amazon One palm-scanning ID checkers.

The Amazon Web Services privacy policy says all the suitable things.



Finally, the quantity of company tax Amazon pays in Australia has been brought into query. The company has used a variety of tactics to legally reduce the income taxes it pays all over the world.

What does the long run hold for Amazon in a post-COVID world?

What will change at Amazon when Bezos steps down? We’re unlikely to see a dramatic shift within the short term. For one thing, Bezos just isn’t departing entirely – he’ll stay involved as “executive chairman”. For one other, his successor, Andy Jassy, has been with Amazon since 1997.

Jassy is the pinnacle of Amazon Web Services (AWS) and already probably the most vital people within the tech industry. AWS has been on the forefront of simplifying computing services, driving the cloud computing revolution and influencing how organisations purchase technology.

Incoming Amazon CEO Andy Jassy currently heads up Amazon Web Services.
Isaac Brekken / AP

Jassy’s long history, intimate knowledge of the organisation, and technological expertise will little question stand Amazon in good stead.

However, he faces a monumental undertaking. Jassy will inherit responsibility for greater than one million employees, selling thousands and thousands of various services.

His expertise in AI and machine learning at AWS shall be increasingly vital as these play a greater role in Amazon’s operations – for all the things from optimising warehouses and giving higher search results to business forecasting and monitoring warehouse staff and delivery drivers.

The physical lockdowns and online acceleration driven by the COVID-19 pandemic provided the perfect conditions for a corporation that has been called “the all the things store”. Supporters and critics will watch with interest to see if this continues to be true in a post-COVID environment.

This article was originally published at theconversation.com