New Amazon CEO Andy Jassy is picking up the pieces following the departure of his predecessor, Jeff Bezos, and a complaint filed by the Federal Trade Commission (FTC) over the tech giant's alleged anti-competitive practices.
The FTC formally filed the complaint on Sept. 26 following a four-year probe on the e-commerce giant. It accused Amazon of penalizing sellers who offer lower prices on other platforms, altering search results to favor paid ads, and promoting its own brands over others. Moreover, the company used its position to raise prices, overcharge third-party sellers, and suppress competition.
While the FTC's investigation was initiated during Bezos' tenure, Jassy is now in the unenviable position of addressing these allegations. Meanwhile, the former CEO is living his best life after stepping back from Amazon in July 2021. As of writing, Bezos and his fiancee Lauren Sanchez have been living a lavish lifestyle on his $500 million yacht named Koru while sailing through the Mediterranean – a "never-ending vacation" as described by the Daily Mail. (Related: Amazon becomes first company ever to lose $1 trillion in market value.)
Sucharita Kodali, vice president and principal analyst at Forrester Research, could not help but express her sympathies toward the new Amazon CEO. "He is cleaning up a mess that somebody else created, and he is doing it while trying to keep the ship afloat," she remarked.
Jassy trying to revive Amazon following post-pandemic plunge
During the peak of the Wuhan coronavirus (COVID-19) pandemic, Amazon grew its profit as lockdowns and safety concerns led more people to rely on online shopping and delivery services. However, as the world gradually returned to pre-pandemic routines, Amazon began losing a near-record high of $1.88 trillion in market capitalization on July 21. The company's shares tumbled by nearly 50 percent, and the company's future prospects remain uncertain as consumers revert to their pre-lockdown spending patterns.
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Amazon Chief Financial Officer Brian Olsavsky explained that the e-commerce giant's downturn was caused by "the continuing impacts of broad-scale inflation, heightened fuel prices and rising energy costs." He also pointed his finger at the Federal Reserve tightening monetary policies, alongside a pullback in information technology spending by businesses. The latter, Olsavsky noted, has adversely affected Amazon's highly profitable cloud computing division.
The alarming earnings update from Amazon executives further exacerbated the situation, sparking an unprecedented selloff of Amazon stocks and accelerating the company's rapid decline in market value. Moreover, the company suffered a $2.7 billion loss last year due to over-expansion under Bezos' tenure.
But thanks to Jassy's strategic decisions, the company returned to profitability in the last quarter – with a 50 percent increase in its share price since the beginning of 2023. He has also been returning several of his predecessors' pet projects such as the warehouse expansion program and investments in automated stores. Jassy has also imposed cost-cutting measures, laying off 27,000 employees and demanding cost reductions at Amazon Studios, its $7 billion TV production arm.
The new Amazon CEO has also espoused return-to-office work similar to his predecessor, warning staff that things "probably [aren't] going to work out" for them if they continue working from their homes. He declared back in March: "As a leadership team, we've decided that we will be better for customers and for our business being in the office."
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Watch this clip from the "Rudyk Report" about Amazon's layoffs during the tenure of Bezos.
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