Even after stepping aside as CEO, Amazon founder Jeff Bezos appears likely to keep identifying new frontiers for the world’s dominant e-commerce company. His successor, meanwhile, gets to deal with escalating efforts to curtail its power.
Tuesday’s announcement that Bezos will hand off the CEO job this summer came as a surprise. But it doesn’t mean Amazon is losing the visionary who turned an online bookstore founded in 1995 into a behemoth worth US$1.7 trillion that sometimes seems to do a little bit of everything.
Bezos, 57, has never let Amazon rest on its laurels. In the last year alone, it bought a company developing self-driving taxis; launched an online pharmacy selling inhalers and insulin; and won government approval to put more than 3,200 satellites into space to beam internet service to Earth.
Long-time Amazon executive Andy Jassy will be the new CEO, but Bezos will be the company’s executive chairman — corporatespeak for board leaders who, unlike most, stay involved in key operational decisions. Think Robert Iger at Disney, Howard Schultz at Starbucks, or Eric Schmidt at Google after handing off the reins a decade ago.
“Jeff Bezos has held a firm grip on the company for a long time, ” said Ken Perkins, president of RetailMetrics LLC, a retail research firm. “I have to believe he will have a say in what is going on and have a big hand in big picture decisions.”
Amazon’s chief financial officer, Brian Olsavsky, made the move sound like a mere shuffling of chairs. “It’s more of a restructuring of who’s doing what,” he said during a Tuesday call with reporters.
Investors didn’t bail after hearing about Amazon’s forthcoming change in command, and instead focused on the company’s blockbuster earnings, which it also announced Tuesday. Amazon’s stock edged up slightly in Tuesday’s extended trading — not something that tends to happen when Wall Street is worried about a management shake-up.
“I don’t think he’s going to be completely hands off,” CFRA analyst Tuna Amobi said of Bezos.
In a blog post, Bezos said the CEO job had pulled him away from exploring new ideas and initiatives that could yield growth opportunities. He now intends to focus more on such innovation, along with other ventures such as his rocket ship company Blue Origin and his newspaper, The Washington Post.
“Being the CEO of Amazon is a deep responsibility, and it’s consuming,” Bezos wrote. “When you have a responsibility like that, it’s hard to put attention on anything else.”
The shift will saddle Jassy with some of the responsibilities that Bezos clearly didn’t enjoy. Perhaps the most daunting is the increasing scrutiny of Amazon’s clout in an online shopping market that has become even more essential to consumers during the past year’s pandemic.
The U.S. government already has slapped two other technology powerhouses, Google and Facebook, with antitrust lawsuits. Both regulators and lawmakers have left little doubt that they are taking a hard look at whether similar action is warranted against Amazon and Apple.
Jassy will likely have to ward off the antitrust threat while also trying to forge his own legacy. A revered company founder can cast a long shadow.
“Amazon’s size makes some industries uncomfortable, some governments uncomfortable and Andy Jassy will have to deal with the consequences,” Gartner analyst Ed Anderson said. “That will be some of the new era of his leadership.”
Jassy also may face pressure from critics who believe Amazon’s success has been built in part by mistreating many of its 1.3 million employees, especially those in the distribution warehouses and delivery trucks who are paid far less than the tech engineers while also facing more hazardous conditions.
“Jeff Bezos’ departure as CEO is a chance for Amazon to turn over a new leaf,” said Robert Weissman, president of Public Citizen, an activist group that in Washington. “It should start by paying all its workers a living wage and ensuring they have safe and healthy working conditions.”
Analysts said Bezos appears to have picked a successor who’s up for the challenge. Jassy is highly respected for building up Amazon’s web services division, which runs many of the world’s biggest websites. Earnings from that cloud-computing service also helped subsidize the company’s online shopping operations as it cut prices so low that it lost money for many years.
“He’s proven himself in building the most profitable part of the company,” Amobi said. “His challenge is translating that to the broader e-commerce platform.”
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Pisani reported from New York and Liedtke reported from San Ramon, California. Associated Press writers Mae Anderson and Anne D’Innocenzio in New York, Marcy Gordon in Washington and Matt O’Brien in Providence, Rhode Island, contributed to this story.
TOKYO (AP) — Japanese technology group SoftBank swung back to profitability in the July-September quarter, boosted by positive results in its Vision Fund investments.
Tokyo-based SoftBank Group Corp. reported Tuesday a fiscal second quarter profit of nearly 1.18 trillion yen ($7.7 billion), compared with a 931 billion yen loss in the year-earlier period.
Quarterly sales edged up about 6% to nearly 1.77 trillion yen ($11.5 billion).
SoftBank credited income from royalties and licensing related to its holdings in Arm, a computer chip-designing company, whose business spans smartphones, data centers, networking equipment, automotive, consumer electronic devices, and AI applications.
The results were also helped by the absence of losses related to SoftBank’s investment in office-space sharing venture WeWork, which hit the previous fiscal year.
WeWork, which filed for Chapter 11 bankruptcy protection in 2023, emerged from Chapter 11 in June.
SoftBank has benefitted in recent months from rising share prices in some investment, such as U.S.-based e-commerce company Coupang, Chinese mobility provider DiDi Global and Bytedance, the Chinese developer of TikTok.
SoftBank’s financial results tend to swing wildly, partly because of its sprawling investment portfolio that includes search engine Yahoo, Chinese retailer Alibaba, and artificial intelligence company Nvidia.
SoftBank makes investments in a variety of companies that it groups together in a series of Vision Funds.
The company’s founder, Masayoshi Son, is a pioneer in technology investment in Japan. SoftBank Group does not give earnings forecasts.
Shopify Inc. executives brushed off concerns that incoming U.S. President Donald Trump will be a major detriment to many of the company’s merchants.
“There’s nothing in what we’ve heard from Trump, nor would there have been anything from (Democratic candidate) Kamala (Harris), which we think impacts the overall state of new business formation and entrepreneurship,” Shopify’s chief financial officer Jeff Hoffmeister told analysts on a call Tuesday.
“We still feel really good about all the merchants out there, all the entrepreneurs that want to start new businesses and that’s obviously not going to change with the administration.”
Hoffmeister’s comments come a week after Trump, a Republican businessman, trounced Harris in an election that will soon return him to the Oval Office.
On the campaign trail, he threatened to impose tariffs of 60 per cent on imports from China and roughly 10 per cent to 20 per cent on goods from all other countries.
If the president-elect makes good on the promise, many worry the cost of operating will soar for companies, including customers of Shopify, which sells e-commerce software to small businesses but also brands as big as Kylie Cosmetics and Victoria’s Secret.
These merchants may feel they have no choice but to pass on the increases to customers, perhaps sparking more inflation.
If Trump’s tariffs do come to fruition, Shopify’s president Harley Finkelstein pointed out China is “not a huge area” for Shopify.
However, “we can’t anticipate what every presidential administration is going to do,” he cautioned.
He likened the uncertainty facing the business community to the COVID-19 pandemic where Shopify had to help companies migrate online.
“Our job is no matter what comes the way of our merchants, we provide them with tools and service and support for them to navigate it really well,” he said.
Finkelstein was questioned about the forthcoming U.S. leadership change on a call meant to delve into Shopify’s latest earnings, which sent shares soaring 27 per cent to $158.63 shortly after Tuesday’s market open.
The Ottawa-based company, which keeps its books in U.S. dollars, reported US$828 million in net income for its third quarter, up from US$718 million in the same quarter last year, as its revenue rose 26 per cent.
Revenue for the period ended Sept. 30 totalled US$2.16 billion, up from US$1.71 billion a year earlier.
Subscription solutions revenue reached US$610 million, up from US$486 million in the same quarter last year.
Merchant solutions revenue amounted to US$1.55 billion, up from US$1.23 billion.
Shopify’s net income excluding the impact of equity investments totalled US$344 million for the quarter, up from US$173 million in the same quarter last year.
Daniel Chan, a TD Cowen analyst, said the results show Shopify has a leadership position in the e-commerce world and “a continued ability to gain market share.”
In its outlook for its fourth quarter of 2024, the company said it expects revenue to grow at a mid-to-high-twenties percentage rate on a year-over-year basis.
“Q4 guidance suggests Shopify will finish the year strong, with better-than-expected revenue growth and operating margin,” Chan pointed out in a note to investors.
This report by The Canadian Press was first published Nov. 12, 2024.
TORONTO – RioCan Real Estate Investment Trust says it has cut almost 10 per cent of its staff as it deals with a slowdown in the condo market and overall pushes for greater efficiency.
The company says the cuts, which amount to around 60 employees based on its last annual filing, will mean about $9 million in restructuring charges and should translate to about $8 million in annualized cash savings.
The job cuts come as RioCan and others scale back condo development plans as the market softens, but chief executive Jonathan Gitlin says the reductions were from a companywide efficiency effort.
RioCan says it doesn’t plan to start any new construction of mixed-use properties this year and well into 2025 as it adjusts to the shifting market demand.
The company reported a net income of $96.9 million in the third quarter, up from a loss of $73.5 million last year, as it saw a $159 million boost from a favourable change in the fair value of investment properties.
RioCan reported what it says is a record-breaking 97.8 per cent occupancy rate in the quarter including retail committed occupancy of 98.6 per cent.
This report by The Canadian Press was first published Nov. 12, 2024.
