Amazon’s CEO Fumbles

By Douglas A. McIntyre Published Feb 3, 7:30AM EST

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Amazon’s CEO Fumbles — © AdrianHancu / iStock Editorial via Getty Images

The New York Times headline read, “Amazon Reports Almost No Profit and Slowing Growth.” The newspaper mentioned that the situation would not improve this quarter. Amazon’s serious problems began when Chief Executive Officer Andy Jassy took over in July 2021. It is hard to understand why long-time CEO and billionaire Jeff Bezos does not return to run one of the largest companies in the world.
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Revenue in the final quarter across the entire company grew by 9% to $149.2 billion. It was a disappointment for what has been one of America’s great growth companies. Net income was $278 million, down from $14.3 billion in the same period in 2021. (Click here for the companies making the most profit per second.)
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Amazon’s two huge legacy businesses lost money in the quarter. North American e-commerce lost $240 million on $93.4 billion. International e-commerce lost $2.2 billion on $34.3 billion. The only operation that saved Amazon’s bottom line was the AWS cloud operation, which posted a profit of $5.2 billion on revenue of $21.3 billion. Unfortunately, that profit did not move from the year before. Cloud computing is Amazon’s future, so the number should cause investor anxiety. And Amazon said AWS growth would be a challenge in 2022.
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Jassy is trying to balance customer service with cost cuts. What is left out of that equation is that he overbuilt the e-commerce infrastructure, which has been the primary cause of Amazon’s bottom-line problems. His role in this is not something he has admitted entirely.
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Amazon’s investors have not been hurt as badly as the 18,000 people it laid off. However, they have been bloodied. After a recent recovery, Amazon is still down 23% in the past year. The new results will push it down even further.

Amazon has to be fixed. Jassy cannot do it. That leaves Jeff Bezos.

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.