Andy Jassi, Chief Executive Officer of Amazon.Com Inc., during the GeekWire Summit in Seattle, Washington, USA on Tuesday, October 10th. 5, 2021.
David Ryder | Bloomberg | Getty Images
Yassy, a 25-year Amazon veteran, succeeded Jeff Bezos July 5, 2021. A few days later, the stock hit an all-time high. Since then, it has fallen by more than 40%, including 35% second quarterthe sharpest decline in any period since 2001.
As just the second Amazon CEO since Bezos founded the company in 1994, Yassy is facing a macroeconomic hurricane completely out of his control. From the ongoing consequences COVID-19 pandemicrecord inflation and rising interest rates for supply chain restrictions and war in UkraineAmazon faces the prospect of rising costs and a slowdown in consumer spending as investors pull out of tech stocks that led to the recent bull market.
But it’s not just the economy. There is also the threat of antitrust regulation, as legislators get closer to the passage of a landmark law aimed at limiting the power of Amazon and other tech giants. And Yassy is fighting a labor struggle that culminated in a Staten Island, New York, warehouse vote in April. form the first company union in the United States. Amazon is challenging the union’s efforts in court. Meanwhile, some of the company’s most senior executives have quit.
Last July, when Yassi officially took over as CEO, Amazon’s business was stronger than ever. The company just made a notch first quarter of 100 billionreflecting the pandemic-driven surge in e-commerce activity that has pushed Amazon into a meteoric expansion.
History developed rapidly. Amazon is now losing some of the warehouse space it added during the pandemic. And after months of staff shortages, the company is now overwhelmed in its fulfillment network as e-commerce cooling means many recent employees are no longer needed.
Due to the slowdown in its core business, Amazon announced in April what did he book the weakest quarterly revenue growth since the dot-com crash of 2001 and the first quarterly loss since 2015.
Investors are now wondering if the poor results are a reflection of management struggles or just a brief setback as the company emerges from a global pandemic and faces a falling economy.
Asked if Yassy was responsible for the over-expansion of warehouse space and the recent weakness in Amazon’s business, Tom Forte, an analyst at DA Davidson, said the new CEO still has a right to doubt.
“Today, I still feel the answer is no,” said Forte, who has a buy recommendation for the stock. “But I’m monitoring to see if there’s a sustained multi-year period of weakness in stocks, at which point investors will start looking at Andy and laying the blame.”
Forte is not alone. Following the company’s first-quarter earnings report, several Wall Street analysts said Amazon’s problems are likely to be resolved in the coming months.
But with more than 1.6 million employees and an investor base that has come to expect operational excellence, Jassi has something to prove, no matter the direction of the economy.
“I am convinced that large companies face the greatest internal risks,” Matt McIlwain, managing director of Madrona Venture Group in Seattle and a long-time Amazon investor, said in an email. “The key for Amazon will be to maintain their culture of innovation and make decisions quickly and flexibly so they can continue to grow at their scale.”
An Amazon spokesperson declined to comment on the story.
Labor problems are unlikely to disappear anytime soon.
After union victory in Staten Island Amazon resisted aggressively against other organizational efforts and staunchly maintains its opposition to trade unions. Next reports unsafe working conditions in their warehouses, Iasi said Injury rates at Amazon are “sometimes misunderstood,” but he acknowledged that Amazon could do more to improve safety at its facilities.
“At our scale (we hired over 300,000 people in 2021 alone, many of whom were new to this kind of work and needed training), it takes careful analysis, thoughtful problem-solving, and a willingness to invent to get you where you want to be. ,” Yassy wrote in his first shareholder letter in April. “We analyzed each path of the process to understand how we can improve it.”
Office workers have their own set of demands and have gained significant leverage by demanding higher wages, better benefits and more flexibility when working from home. Last October Amazon retreated from his office-oriented culture when he admissible individual managers decide how often their employees will have to come to the office.
Amazon headquarters is virtually empty on March 10, 2020 in downtown Seattle, Washington. In response to the coronavirus outbreak, Amazon has advised all employees in its Seattle office to work from home, leaving much of downtown almost empty.
John Moore | Getty Images
Earlier this year, in response to a strengthening Amazon job market reinforced his maximum base salary to $350,000, up from the previous high of $160,000.
This is not enough to keep some of the company’s longest-serving employees, who are leaving quickly. This trend preceded Jassi’s rise to power. Calculated business insiderunusually high figure for the company.
Under Jassy, the exodus continued. Last month, 23-year-old Amazon veteran Dave Clark resigned just over a year after he took over the role of head of retail from Jeff Wilk, one of Bezos’ top aides who resigned at the beginning of 2021. Later in June, two prominent black leaders — COO Dave Bozeman and Alicia Boler-Davies, senior vice president of global customer service and a member of the company’s management team — announced their departures.
Ian Fried, a former Amazon vice president who has overseen the development of key projects such as Alexa and Kindle, said that as the company grows, it becomes more difficult to attract and retain the same talent.
“The fact that it’s growing is a desirable place for innovators, whether they’re engineers, marketers, retail experts or whatever, if that goes away I feel a lot is starting to fall apart,” Freed said. “I don’t necessarily think it’s going away, but I think it’s always the biggest risk.”
Amazon has stated that it has high retention rates. The average tenure for a vice president is about 10 years, and for senior vice presidents it is “much longer,” the company said.
Since then, investors have been looking for a potential fourth or fifth pillar. Now they’ll be asking Yassy what could move a $1.1 trillion market cap company.
Bezos has given the green light to ambitious projects such as the Echo smart speaker and delivery drones, and has also taken on unusual ambitious projects outside of Amazon, such as investing $42 million to create “Hours of a long now” which will point the time to the next 10,000 years, and the launch of space flights by Blue Origin.
Jeff Bezos, CEO and founder of Amazon, holds the new Amazon Kindle Fire HD during a product launch in Santa Monica, California Thursday, September. 6, 2012. (AP Photo/Reed Saxon)
Yassy’s big innovation was AWS. After serving as Bezos’ “shadow” in the early 2000s, Yassy was personally empowered by Bezos to start a cloud business that turned into a $60 billion juggernaut and the company’s profit center.
“Andy is a visionary in his own right, but in a different way than Jeff,” Craig Berman, Amazon’s former vice president of global communications, said in an interview. “I think it would be terribly unfair to say that Jeff is a better innovator or builder than Andy.”
During Amazon’s general meeting in April, Yassi reminded employees that he “was here when we were only selling books.” From there, the company moved into music, video, consumer electronics, cloud computing, devices and streaming entertainment, Yassi said at the meeting, the recording of which was obtained by CNBC.
As he explores new markets, Yassi said the company is asking if the opportunity is big enough, if it’s being well served, if Amazon has a “differential approach” and if it has credibility, or “can we build credibility quickly?” »
“If we like the answers to these questions, we will take this opportunity, even if it is really different from what we have done in the past,” Yassi said. “And that philosophy has been what you see in the different customer experiences and business segments that we pursue.”