Bezos successor takes over as labor controls and antitrust practices grow



Andy Jassy, ​​the new CEO of Amazon, speaks at a conference in 2017. Jassy led the creation of Amazon Web Services and spoke freely on political issues, but now faces the projectors as the head of the entire company.

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Five months since Jeff Bezos announced Andy Jassy would be the next CEO of Amazon, the transfer time has arrived. Bezos stepped down on Monday, becoming executive chairman of the company’s board at a time when Amazon was achieved unprecedented gains while being subject to regulatory control.

Jassy, ​​already a full-fledged CEO at the head of Amazon Web Services, has become the face of a company that tries to present itself as a caring employer, steward of the environment, and good corporate citizen. To this end, the company last week added two new principles – “Strive to be the best employer on earth” and “Success and scale bring great responsibility” – to a list of guidelines for employees in managerial positions.

Amazon has grown bigger than ever, in part thanks to the pandemic. Its already huge retail business has spent the past year expanding to meet increased demand from pandemic shoppers stuck at home. The business will benefit from consumers’ increased penchant for online shopping for pet food, drink and supplies, trends that ecommerce watchers say will remain intact even with storefronts reopening in the United States. United. Additionally, Jassy’s own cloud computing unit controls a third of the market and wields formidable power when it comes to the services it maintains online.

Ongoing antitrust investigations oppose this image of Amazon as friendly, lawsuits and potential legislation. The company’s ability to compete with other brands in its own online marketplace has prompted a group of federal lawmakers to propose legislation that separate these categories of companies and remove any competitive advantage for Amazon.

The National Industrial Relations Council is also reportedly considering an investigation into a model of retaliation against workers who organize walkouts at Amazon, after finding in some cases that the company had unlawfully dismissed or sanctioned these workers. Amazon is also awaiting a ruling from the labor council on whether its actions during an organizing drive at an Alabama warehouse. violated labor laws, which has the potential to trigger a new union election. The International Brotherhood of Teamsters has announced that empower workers at Amazon is its top priority.

Like Bezos before him, Jassy will face this scrutiny while taking on a massive leadership role. It remains to be seen how he will handle the investigations, in addition to leading the divisions of the company for which he was not previously responsible. It has quietly made Amazon’s cloud services business a market leader and the most profitable segment of the business. But he didn’t face questions from regulators and Congress.

His past appearances in the press show that Jassy is comfortable talking about controversy and aware of Amazon’s positions on his size and dominance. But he was not then the head of the company.

Now he will face criticism over a range of issues, including the company’s creation of facial recognition products; the product safety and authenticity sold by third-party vendors who account for about half of Amazon’s sales; its impact on the environment; and its warehouse processing and delivery men. In the background: increased questioning of if Amazon has illegal monopoly power.

Jassy adheres to Amazon’s corporate values

Analysts weren’t surprised by Jassy’s promotion. A seasoned Amazonian who worked closely with Bezos, Jassy created AWS from its inception in 2003. In a foreword by Cloud Computing Book 2017, Jassy wrote that his team used an in-house software tool developed to increase the efficiency of Amazon’s engineering teams and made it a valuable product for other companies as well. This led to the creation of Amazon Simple Storage Service, or Amazon S3.

Since then, AWS has come to dominate the cloud computing industry and Jassy has continued to gain prominence within the company. In 2020, Jassy had arrived at own more than $ 35 million in Amazon stock as part of his remuneration. Monday it was awarded 61,000 additional shares which will run for ten years. As the market opened on Tuesday morning, the additional shares were worth more than $ 215 million.

Amazon has not made Jassy available for an interview for this story. His past speeches and writings show that Jassy adheres to Bezos’ philosophy of embarking on a new idea, building on any success, or moving on if it fails.

“It’s a nifty approach to succession planning,” said Nicholas McQuire, analyst at CCS Insight who focuses on executives. “Bezos created the model of Internet businesses: rapid innovation, large scale and relentless focus on the customer,” he said, adding that Jassy is one of the few people who can replicate this formula.

“Often times you will have to reinvent yourself many times over” to create a business that will last for decades, Jassy said in a keynote address at AWS re: Invent conference in December, he went on to praise Netflix for “cannibalizing its own DVD rental business” as it anticipated how important streaming would become.

Jassy’s understanding of why cloud computing has become essential for businesses around the world also applies to Amazon’s broader success. “With the cloud, you provision what you need, you scale seamlessly when needed, and you lose resources and costs when you don’t need them,” Jassy said in the foreword to the 2017 book.

It’s the kind of flexibility that’s central to Amazon’s philosophy.

Jassy will have to face the controversy

Pursuing a corporate mantra that made Amazon a success for shareholders is one thing. Another faces external criticism and attempts to regulate. That same taste for scaling has put Amazon in the crosshairs for its market dominance and potential power to crush or acquire competitors.

In a 2019 interview with PBS Frontline, Jassy answered questions about whether Amazon has too much power. At the time, he said Amazon didn’t consider itself that big, accounting for only around 1% of the retail industry internationally. No wonder it will be a different task to convince antitrust regulators that Amazon is raking in $ 1 in $ 100 in global retail sales. (Its share in the United States is higher).

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Regulators are particularly concerned on Amazon’s private label business and its potential ability to unfairly undermine other retailers on its platform with cheaper competing products.

Jassy was also straightforward on political issues. As Business Insider highlighted, he tweeted in favor of a US Supreme Court ruling maintaining job protection for LGBTQ workers and decried the high incarceration rates in the United States, and he highlighted the injustice of the murders of Ahmaud Arbery, Breonna Taylor and George Floyd during a AWS re: Invent opening speech. Bezos has spoken less on political issues, and it’s unclear whether Jassy will be able to speak so freely now that he’s the face of Amazon.

Jason Schloetzer, a professor of business administration at Georgetown University, said Jassy will need to take a diplomatic approach as the face of Amazon. Still, the new CEO is unlikely to have to give up his political positions, he said. “It seems there is a wave of organizations starting to take these more public positions,” Schloetzer said. “It’s part of the movement of organizations trying to play a positive role in society, rather than just being there to generate shareholder value.”

Then there is Amazon’s ability to control what exists on the Internet. AWS controls over a third of the cloud market. Technically, AWS could take much of the Internet offline as well. In the same Frontline interview, Jassy alluded to this power.

“If there is documented evidence that people are misusing technology,” he said, “we will suspend the ability of people not only to use technology, but to use AWS.”

Jassy was responding to concerns that law enforcement was abusing his facial recognition technology. But his words took on new meaning this year when AWS cloud hosting services suspended from Talking, a social media platform used during the Capitol Riot on January 6, for failing to moderate content calling for violence.

Now, Jassy will have to endure the pressure from Congress and regulators not only as CEO of Amazon, but also as the owner of the decision to take Speak Offline. Whether or not AWS was right to do so, it will need to explain what this means for the company.



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