Andy Jassy is inheriting the top job at Amazon this year along with a tidal wave of threats facing the e-commerce juggernaut.
Billionaire Jeff Bezos will be stepping down from day-to-day operations of the empire he built later this year amid mounting labor, regulatory and even competitive pressures. But some experts think Jassy may be better equipped in some ways to handle the coming challenges than Bezos — a political lightning rod due to his vast wealth and ownership of the Washington Post.
“It’s a unique period in the history of Amazon,” said Nicholas McQuire, a senior vice president at technology and research consultancy, CCS Insight. “The bumps in the road that will materialize over the next couple of years will require new things of Amazon that will test Andy Jassy.”
In addition to growing labor unrest, Amazon faces probes by the Justice Department and the Federal Trade Commission into whether it unfairly uses its platform to compete with independent sellers on its site. And while the pandemic has only boosted the company’s sales and stock price — competitors like Walmart and Target are also ramping up their online businesses.
In order to fend off rising criticisms, the famously secretive Amazon will need to be more transparent, experts say. And that’s where Jassy comes in as he has already proven himself more “outspoken on social and political issues” than Bezos, according to McQuire.
McQuire pointed to the company’s feud with the Pentagon over the so-called JEDI contract for cloud computing in 2019. The Pentagon awarded the $10 billion contract to Amazon’s cloud computing rival Microsoft, which prompted a lawsuit from Amazon and plenty of outrage from Jassy, who was better positioned to vocalize the company’s claims that Amazon was being punished by then-President Trump, who dubbed Bezos “Jeff Bozo.”
Jassy at the time blasted the award as “political interference,” citing Trump’s “disdain” for Bezos. The Pentagon has said an internal review confirmed Microsoft as the rightful winner of the contract.
Some of the challenges Jassy faces include:
Amazon has long resisted efforts to unionize its workforce. But the pressure is mounting as its nearly 1 million warehouse workers seek to draw attention to their needs by coordinating work stoppages during peak shopping periods, including Prime Day.
Employee activists made significant inroads last year when Amazon faced harsh criticism for its warehouse working conditions during the pandemic, leading to improved pay and coronavirus protections.
On Feb. 8, Amazon will face its first union test since 2014 in Bessemer, Ala., where some 5,800 warehouse workers will begin voting on whether to unionize.
The coronavirus has forced Amazon’s retail competitors to pick up their e-commerce game with Walmart last year launching a Prime-like membership program called Walmart Plus that offers same-day delivery.
Amazon Web Services — the company’s profitable cloud computing business, which Jassy has run since 1997– is also facing tougher competition from rivals like Google and Microsoft.
“Amazon’s competition like Walmart and Target have finally started to make the right moves and are enjoying success in markets where Amazon is lacking, like online grocery,” Juozas “Joe” Kaziukenas, founder of Marketplace Pulse, which covers Amazon told The Post.
It’s not just US regulators who are looking into claims that Amazon unfairly competes with its third-party sellers. The European Commission late last year issued a charge sheet against Amazon alleging that it uses the nonpublic information it gleans from independent sellers to better push its own products.
Amazon has denied engaging in anticompetitive practices. “No company cares more about small businesses or has done more to support them over the past two decades than Amazon,” the company told the Wall Street Journal in response to the EU’s claims last year.
Even if no lawsuits result from the US probes, Jassy is taking over the reins at a time when lawmakers are becoming increasingly vocal in targeting Big Tech.
“There has been a lot of anti-competitive concerns surrounding Amazon, but it keeps getting louder and has moved from articles in the press to official government inquiries,” Kaziukenas said. “There is going to be a lot more of this.”