Thank you Andy so much for coming down. It's really wonderful to have you here in person. It's my pleasure to be here. Thanks you. Has found out we actually lived in the same dorm in college, just a few years apart. So it's been almost a year since you took over from Jeff as CEO of Amazon, and it's been a year of first the first stock split since the dot com boom, the first vote to unionize an Amazon warehouse, your first Bloomberg Technology conference. Thank you. I
want to start with a quick report card. I'm Emii Chang, and welcome to this edition of the Bloomberg Studio One point oh podcast. In February one, Jeff Bezo shocked the world by announcing plans to step down as Amazon CEO. A few months later, he passed the reins to Andy Jase, his longtime top lieutenant, the architect of one of the company's biggest profit engines, Amazon Web Services, Bezos has stayed on as executive chair, leaving Jazz to navigate a critical
inflection point in Amazon's history. How does the company manage market turmoil, rising inflation and regulatory scrutiny, and a push by some warehouse workers to unionize, all while keeping customers coming back joining me on this edition of Bloomberg Studio. At one point, oh, Amazon second CEO Andy Jassey, he joined us from our flagship Bloomberg Technology Summit in San Francisco. I'd like you to grade your view of Amazon's performance, and we've got time later to to really dig in.
But quickly, how would you grade Amazon's performance over the last year with customers. Well, I think we've you know, I'm not sure I'm the right person to grade myself during the year or not, but I'll give you my take. You know, I think with respect to customers, I think
we've done a lot of good, you know. And I think if you look at during the pandemic, which really has extended until the early part of this year, you know, so much as a ppe and food and central items and people equipping their home offices were bought from Amazon, and you know, to scale the way we needed to. Remember, in two thousand twenty, we grew thirty nine percent year over year on a two billion dollar revenue run rate. I mean, it's very it's unprecedented, it's never happened before.
But it was really hard to do that, and we had to take the really big footprint of fulfillment center footprint. We built the first twenty five years of Amazon and doubled it in twenty four months. And we you know, we built a transportation network, which we planned on doing over several years, but because we weren't going to be able to get enough capacity at the cost structure we needed to serve all the big demand in twenty one, we built out that transportation network in just a couple
of years. Uh, you know, we um we doubled, uh nearly doubled the size of our workforce during that time, and we still didn't have enough people to to receive all the items and our fulfillment centers and to ship them, and and so we had to make decisions. We looked at, you know, we didn't have enough people to see them in the right spots to get them to customers as
cost effectively as we normally did. And so we decide, do we just allow ourselves to be out of stock with much longer delivery times and we stock them wherever we can, even if it meant we're gonna have to pay for a lot more transportation costs to get it there. And in all those cases, we sited on the side of customers, and I think we I think customers really appreciated it, and I think you saw it in other businesses.
You know, AWS is a really big part of helping companies and governments have business continuity during the pandemic, and so many companies and organizations in the last year made the strategic decision that they were going to stop running their own infrastructure technology and disproportionately chose AWS to help them move to the cloud. And we spend a lot of time helping them make that transformation. So I think we've done a lot of good for customers, and we
have always sided on the side of customers. So what about investors, I mean, the stock is down significantly from a peak last year. Obviously there's broader market term weil. Yeah, I think, you know, for investors and financially, I'd say it's mixed. You know, I think we have some businesses
that are growing really strongly. If you look at AWS, you know, in year every year, you know, it's not a seventy four billion dollar revenue run right business, it's pretty unusual growth, and we grew fifty percent year every year in our advertising business. You know, it's the thirty
two billion dollar revenue run right business. So some business has grown really strongly, and you know, we've continued to grow in our retail business despite pretty crazy comparables during I think the real challenge for us there is on the cost side, and there have been several things that have happened, um, some of which are more controllable than others. You know. I think the part that's less controllable is
really around inflation. And I think we thought that inflation would start to attenuate in two and with the war in Ukraine, it just went the other way and it's significantly accelerated. So the cost of trucking and line hall and ocean and air and fuel has just substantially gone up, and I think that will tenuate at some point. No one knows how long that will take. I think the more controllable areas for us are really around fulfillment center
capacity and productivity. And I think on the fulfilment center capacity side, it was taking about twenty four months to build new filming centers during the pandemic, and so we had to make decisions, you know, in mid two thousand twenty in early on how much demand we're going to plan for and the team made a decision, which I think in retrospect was a good decision that we were going to build the high side of what we could imagine consumer demand being, because we didn't want to constrain
consumers or sellers who were trying to place inventory, you know, FU filming centers for fulfilment by Amazon, and so, you know, we we end up with more capacity and we need right now, and there's a number of things that we're working on. We we've stopped building on properties where we don't need it yet, and we've let a number of leases laps and not a small number, you know, of
both those things. But you know, we are very confident that we're gonna grow into that cost structure on the on the fulfillment center side, and we decided that if we were going to have to air one way, we'd air on the side of customers, even if it meant short term trouble for us or challenges for us, you know.
And I think on the productivity side, what I would say is that when you build as quickly as we did in the fulfillment center space and the transportation network, you're always gonna have areas that you can optimize and be more streamlined in And that's true for us, And we've had a lot of occasions in our history where we've worked on productivity and made improvements, and we have a lot of clearly defined niches and I'm confident we'renna
get back to the right level of profitability. You are going to sub lease thirty million square feet of space? Is there a mistake? And the execution there because of the overball, Again, because you have to make these decisions two years in advance, and again, if you put yourself back in twenty where we were growing thirty nine percent year over a year on a two five billion dollar revenue run rate, it's very hard to know what's the right amount to build and you have to make a decision.
And we made the decision to air on the side of our consumers and sellers, and we knew it might mean that we might have more capacity for some short period of time, but we were willing to do that because we're always long term oriented and customer focus. Now, how would you grade Amazon's performance with employees, your colleagues? There has been some high profile Yeah, I think that um And when I started in this gig, we had just create a new leadership principle to strive to be
Earth's best employer. And I think we're you know, we spent a lot of time trying to think through what that really means is broad, and I think we've made a fair bit of progress, but it's still early. In my opinion, I think Amazon in general is a unusually
compelling place to work. You know, when you have a mission which is to make customers lives better and easier every day, and relentlessly invent to do so, it's inspiring if you layer on top of that that we you know, we not only make customers lives better, but people get to work on a scale that's nearly unprecedented given the nature of Amazon's business, with a culture that likes to invent and is willing to move fast and its ideas, and willing to be long term oriented, which means if
you want to leave a mark on the world that outlasts you, you have a chance to do so. That combination is really unusual, and I think it's why we rank high and a lot of them polls in great places to work. But I still think there are many areas that we can keep improving, you know, and I think, UM, you know, the first one I'd mentioned is safety. You know, I think that UM you know, in our fulfillment centers,
that is the top priority. And you know, when you get into the details of the numbers and outside of all the spin of it all, you know what we're about average there, but we're not trying to be average, you know. We want to be the best in the industry and the best in the world at it. And that's a high priority in an area that I'm passionate
about and the team is passionate about. I think we've made a lot of progress in UM over the last several years, including last year, on diversity and inclusion, but to really get to where we want to get to, I think we have a lot of work to still do.
Their You know, we have a very strong set of managers in Amazon, but we have grown so much in the last ten years, and we have so many new managers, many of whom we have promoted internally, and we have management trading programs, but I think you've got to kind of retool those things to to really make sure that you have managers who are developing your teammates the way you want managing is a privilege, and so you know, we've we've spent a lot of time in the last
number of months um refining our management training programs that you'll see us rolling out, you know. And then I also think that our services and tools to our external facing customers have outpaced those for our internal employees. And I think we have a lot of work we can do to make our employees everyday lives easier. And we have we've identified kind of a top hundred list of of areas that we can be better at that we're
just metronomically stepping through. And so we've made a lot of progress, but we have a lot of work to you still say, Clark just announced fairly abruptly that he's leaving Amazon after twenty three years. He has been described as an absolutely integral member of the S team, knew the logistics and fulfillment center network better than anyone. Just
announced he's going to be co CEO flex Port. What happened with Dave specifically and where you surprised, Well, you know, I think, uh, different people want to do different jobs with different responsibilities at different times, and it's incredibly personal, and I think Dave wanted a different gig at this point,
and I don't begrudge him at all. I mean, Dave has added so much to Amazon over the last twenty three years, and particularly over the last two and a half years, which have been among the most crazy in
the history of Amazon. And I think that if you want to build a business that lasts a hundred plus years, and that lasts all of us, you have to get used to these sort of transitions and make sure that you're you know, you're doing the right succession planning and you've got the right talent to keep building the business. And you know, we've done that historically and I expect we'll do it again. Elon Musk just came out saying he has a super bad feeling about the economy, Tesla
laying off ten percent of his staff. Jamie Diamond says he's preparing for an economic hurricane. The World Bank just slashed its forecast for global growth. How do you feel about the economic climate? Well, it wasn't planning on giving any guidance to please, but super bad or super super bad, I think, Uh, there's some things that relates to Amazon that are useful to remember, you know, I think the first pieces, remember the of the of the worldwide retail market,
segment share is offline. And if you believe that that equation is going to flip at some point, which we do, I think it will will flip over a long period of time. But if you believe that the companies that have a customer experiences like we do, I think we're gonna are gonna do all right. And you know, and that and great customer experiences mean you have really broad selection, low prices, and very fast delivery that's reliable to customers. Yeah.
I also think that if you look at different down turns, UM, you know, should we have one at some point And we've been through a few obviously in the twenty five years that I've been at Amazon. Customers change their habits. You know. They tend to be pickier about what they buy and when they buy, and who they buy from, and they often pick the partners and the companies that they trust, you know, and that have great customer experiences
like the dimensions I mentioned earlier. UM, And so you know, I also think there's you know, those two reasons, those two factors give me some optimism that even if we have a downturn, that we have the potential to still grow. I would say that regardless though, we have so many things that we believe we can do better for customers. We have a roadmap that's you know, probably three to five years long, and we're going to continue to invent.
We're gonna continue to be insurgent, and we have a lot of work to do to get to where we think we ultimately can get for customers. Now, when it comes to the stock, as I mentioned, it has fallen significantly. Do you think investors are missing something or has tech just been overvalued? And this also of course matters to employees who are significantly paid in stock. Well, you know, look, I haven't been at Amazon for twenty five years. I arrived at the company three weeks before we went public.
I have never tried to predict what the stock is going to do, and any time I've tried to a little bit, I've been wrong. So, you know, I think it's I think it's pretty hard to um uh, pretty hard to predict what it's going to be in any short period of time. I do really believe that, Benjamin, that Benjamin Graham maximum that um in the short term, the stock market tends to be a voting machine in the long term, it tends to be a weighing machine.
And I think if you you know, we've been through a lot of points in twenty five years to be an Amazon where the macro factors are off and um stocks are down. Our stock is down, but you can't really control that, you know. We have a concept. We talked about a lot of Amazon inputs and outputs, you know, in the ultimate output for a company of share price, you know, and then other big outputs are free cash flow or profit or revenue. You can't really manage the outputs.
You have to manage at the input level, and that's where we spend all our time. And so in these types of circumstances, you have to focus on what customers care about and building for them in the long term and inventing on their behalf. You got to get your cost structure in the right spot. But if you do the right things for the business long term, things tend to work out. I think we've had very good returns for investors, and I expect that to be true. Again.
I have, as you could probably tell a lot of optimism for and I'm an optimistic person, but I also, um, you know, there's this food fighter song called Congregation that has that line you need blind faith, but no false hope, you know. So I do have blind faith, but I also think I don't have false hope. You know. I have a lot of of data and uh, you know, and and I think insights internally where all of our
businesses are on the right path. But if you measure at any one point with lots of things happening around you, you may not get to the same conclusion that you get too. Long term, what are the moon shots at Amazon that are capturing most of your time and attention? What is going to define the next era of Amazon? I mean is it? Is it astro the home robot, or is it something else? Well, you know, we have a unique way that we look at big new investments. And I'm not sure it's right or wrong. It just
happens to be our way. And we ask ourselves when we're considering something four questions. We ask, Uh, if it's successful, can to be big and move the needle? At Amazon? Is it being well served today? Do we have a differentiated approach? And do we have competence there? And if not, can we acquire clean If we like the answer to those questions we'll go pursue it with a single thread team that isn't distracted by the rest of the business.
And sometimes that leads to innovation investments that seemed pretty obvious, Like you know, when I got to the company was a books only retailer, and then we expanded to music and video and electronics and choice, it seems obvious to people. Other times that process does not lead to investments that seem obvious to people. I mean, AWS was something that people externally and internally thought was a little bit nutty
at the time. But just imagine what Amazon would be today without AWS and and I think that you see the same thing here. You know that there are so many significant investments from making that I'm excited about. I'm gonna have to constrain myself to a few, but you know, I'm really excited about what we're doing in the prime video space. I think we're clearly on the right track
there and building a significant business. That's interesting because Netflix also just announced some layoffs, first subscriber loss in a decade, Disney cutting back on costs. Do you see Amazon strategy as fundamentally different from Netflix and Disney? And if so, how well you know We're very bullish on it. And remember we all the all the models are a little
bit different. But for Prime Video we have twun or million plus Prime subscribers who are you know, get that entertainment for free by being part of Prime and so we have a little bit different pricing model than some of the others. But I'm incredibly encouraged by what we have coming if you if you look at me. We launched this show Reacher earlier in the year, was a huge hit. We you know, we have a new Masal season. We we just launched the New Boys season, which is
I am a big Amazon, It's very good. Of course, we have glad of the Rings coming up, you know in September and Thursday and football, so I'm very bullish about it. UM we also, you know, we're excited about what we've done with mgm uh. You know, I think some of the assets there will go very well with the rest of what we're doing entertainment wise. We have had supported um channel there or platform there and free
v which I think is appealing. And we have a channel's business, which is also a little bit different, where third party streaming companies will ingest all their content in channels, so they get kind of the leading viewing experience that we've built over a number of years, and then they get to sell monthly subscriptions as a channel to our two million plus prime subscribers. And so if you look at Warner Brothers, Discovery and Paramount and Stars and Global,
they're building really significant subscription businesses. So I'm very bullish about that business. I'm I'm optimistic that we have a chance to build a significant grocery business, which is early stages for us. I am excited about uh Kuiper, which is our low earth orbit satellite that we're building. You gotta remember there three hundred to four hundred million people in the world who have limited to no Internet connectivity. I mean, just think about how different the world is
when you don't have that type of connectivity. And so I think that's a really significant opportunity that has some aws characteristics to it. I continue to be very optimistic about Alexa, you know, building the world's best personal assistant. We have a you know, two hundred million endpoints already that are using Alexa. We're clearly onto something there. And and then you know, our autonomous driving ride hailing service and zooks that were building, you know, here in the
Bay Area. I just think with the way auto consumption is evolving, I think that also is a chance to be a really significant business. Now. I don't know if I don't know if all of them are going to be successful, but if any one of them becomes the fourth pillar for us on top of Marketplace and Prime in AWS were completely different companies, just like we were
when AWS became successful. So I think they're very worthwhile investments and bets, and I'm optimistic about We didn't mention Astro obviously though, powered, but I mean our home robots gonna be where I don't yet where is it? It's not really widely available for sale. What's the status? Hope you good one? Okay, um, thank you. Everyone's very curious about Jeff's role these days. What kind of executive chair
he really is. He said when he left that he'd focus his attention and energies on initiatives that he really cares about as at Amazon. But from the outside, it looks like he's really focusing on philanthropy, he's focusing on space. What kind of an executive chairman is he? Well? He you know, Jeff is always going to be UM involved and UM he has. You know, I'm I feel very lucky to have been in Amazon for twenty five years. I feel very lucky to have worked directly for Jeff
for twenty of them. And we have a really close relationship and have for a long time. And I think we share a lot of the same values about customers and um, how important is to optimize for customers and how high standards they need to be um, you know, given how easy it is for people to switch, and the importance of invention and speed and so, you know, I just feel very lucky to have had the chance to work so closely with him. We still talk all the time. It's it's very useful for me to be
able to seek his council. He did the job for so long and and he's always made himself available. So is your relation I mean, he was your only boss for twenty five years, right, is your relationship fundamentally different than it was when you were the head? Of course, you know, every every single job you have, the relationships different.
You know. Remember the first couple of years I worked for Jeff, I worked is what we call his shadow then, which really like a chief of staff and that was different than when I was starting AWS, which was different from when we got AWS going, and it was, you know, a business that was starting to do well, and and
it's different when I'm in the CEO role. But you know, the constant has always been that we have a great relationship, and we collaborate really well, and I think that we listened to one another and um again, for me to have the ability to bounce different things off of him and seek his council is very valuable. And he's still
focused on Amazon. He still has focused on Amazon. Amazon is poised to become the biggest private sector employer in the world, second only right now Walmart is in that spot, but Amazon will probably soon surpass it. First vote to unionize at an Amazon warehouse, I know you've been spending
a lot of time at warehouses. When you look at someone like Chris Small's who I think some people look at as this modern day hero who got fired pulled off this union vote, what's your message to someone like him, Your message to the folks who think maybe we should join a union. Well, I know, I think that the first thing to be clear about is that employees get to make that choice whether they want to have a union or not. They always have had that choice and
it continues to be their choice. And you know, we happen to think they're better off without a union for a number of reasons, including the fact that you know, it's it's much harder when you have a union to have a direct relationship with your manager and to get things done quickly. So if you see something on the line that you think could be better for your your team, or you or your or customers, you can't just go
to your manager and say, let's change this. You know, there's a whole process in bureaucracy that you have to go through to be able to do that. You know, and and we get you know, when there's a union, we're going to get the feedback filtered by what the union decides is worth bringing up. And we'd much rather hear from every employee whatever is on their mind. And so, you know, I think if you want to continue to have the structure that we've had for all this time,
you have to have really competitive benefits. And then I think if you look at Amazon's they're very unusual in this space. We champion the fifteen dollar minimum wage several years ago. The starting salaries now over eighteen dollars an hour, which you know is more than double the federal minimum wage. You get full health insurance in four oh one K and twenty weeks up to twenty weeks of parental leave. And if you want to get a college education, you
haven't had one. We have a career choice program that let's our fulfillment center associates to be able to do. So. That is a very unusual and compelling set of benefits, and those were all accomplished without a union. So you know, I think that we realize that we you know, we have to continue to work on the relationship with our our employees, and we need to continue to provide the right benefits, and you know, we need to continue to
work on safety, and that's our intention. The FTC has revamped its antitrust inquiry into Amazon and by some accounts, is accelerating it. Are you preparing for an antitrust lawsuit from the FTC? You know, I think that if you are a large company that's growing to a significant extent like we have, you have to be prepared to be scrutinized.
And we have known this for some time, you know, many years and We have tried to run the company with that in mind and knowing that if if somebody look that we would stand up to that scrutiny, and I you know, I think that's what we've tried to do and running the business. We can't control what, you know,
you know, whether organizations bring different suits against us. But I think if you look at our business, if you actually look at the fact, if you take out you know, take out of the equation that there there may not be the most objective you know, leadership when it comes to Amazon in that organization. If you look at the facts, you know, in our retail business, we're about one percent of the worldwide retail market segment share, and remember is
still offline. And if you look in our AWS business, we you know about depending how you measure of the worldwide global I T span is on premises, you know, and then we have a cloud business and then we have a portion of that. You know, we're a leading market segment share in the cloud part of this, but we operate you know, who we compete with in AWS is really on premises UM I T in addition to
the cloud. So you know, these are relatively small percentages of the entire party and you can kind of step through all the businesses. And I think simply because you've been successful in a few different businesses doesn't somehow mean that you have un natural market power. It just means you've been successful in a couple to from customer experiences. But we still have a relatively small amount of market
segment share in those areas. What about the sec you're being sued by them over third party data and how you've used it. Do you think in the past Amazon main mistakes with letting employees internally see how those third party selling sellers were doing, we have we have pretty good control. I mean, you know, we of course disagree with the premise of that, but I would say that we have um very good controls with respect to the data that the different employees sets are able to see.
And you know, I think if you if you look at sellers, we have about two million small medium sized sellers who sell in our marketplace. And by the way, I think that we can be better for sellers. You know, I think that um, you know, we can have better tools from to get started, we can have better tools from the manage what they're doing across their their different Amazon units. I think we can communicate better. There's a
whole bunch of things we can do better. Um, and we agonize over every single email or communication we get from sellers that's you know, critical or where they're unhappy, but we also you know, we get many thousands of very positive emails from sellers, and we do very regularly robust surveying, and a lot more sellers are happy with Amazon than unhappy with Amazon. And I think if you look at what what they're able to do is, you know, as a business, by virtual selling on Amazon versus not,
it completely changes what's possible. Sellers don't really long for e commerce software that exists in lots of places and uh and it's not very expensive. What they love about selling on Amazon is that they get access to our hundreds of millions of customers and that completely changes what their prospects can be in terms of the businesses they're building. So we have a lot of work to do there like we do in a lot of other places. But I think we have a very strong partnership with sellers.
What's the view of the supplied chain right now and how much pain there is going to continue to be and for how long well, you know, I think that, um, there's a lot of challenges in the supply chain still. I mean, it's it's gotten better than it was, but um, there are all sorts of challenges. You know, non perishable goods, electronics, chips is still a really significant issue for all sorts of businesses, and so, you know, I think most companies
are are working really hard to overcome those challenges. In our case, we have tried to order significantly ahead of when we normally do, which again might create risks financially, but we're gonna do it to side on the side of customers. We have worked really hard to open a lot more points of presence and ports and increase our capacity and getting products in. But I think it's going to be something that companies battle with for some time.
What's sometimes six months a year, you know, I don't really answer that, but I don't think it's imminently going away. You know. I think if you look at some of the challenges that we have around capacity, that the inflation worsens, I don't think it's you know, around the corner. You made a huge mark on Amazon with aws. Obviously, what is the mark that you want to make? Still? On Amazon. I mean, in this new role, what's going to define the anti jazz era? Well, I don't I don't really
think of it that way, Emily. I mean, I, um, I don't think it's really about any anti jazz era or any one person you know. And uh and by the way, AWS was not about any one person that you know. If you spend any time on AWS, that is an unbelievable team. Um, not just an incredible leadership team, which it is, but just top to bottom and the number of inventors and people care about customers and operate you know, uh, something where it has to work almost
like a doubt and it's it's always teams. And so what what I'm open for over the next number of years is, um, you know, is really what we took what really unites all the parts of our business, which is we exist to make customers lives better every day and easier every day, and we're gonna keep inventing to do so. And so I look at every single one of our businesses and you know, take our retail business or a consumer business, which is the oldest of our
businesses of it still lives offline. Like I think we have a lot of upside and a lot of growth. And I think as much invention as we've seen the last twenty five years, you know, the time I've been there, I think that's it's gonna look small compared to the next twenty five years. There is a lot for us to invent on behalf for customers, and so you know, I'm excited to be part of the team that makes
that happen. And uh, you know, I also think that there's a lot we can do as we continue to make Amazon a place that employees love working at and it's the place that they can best build their career at. And I also think that you you've seen some of this last few years, but increasingly, you know, we are continuing to you know, to increase the amount that we give back to the communities in which we have big presence, and that really matters to me. I think we have
a responsibility to do that. And um, so you know, it's it's it's a long journey that we're working on, but I'm excited to be part of it, and uh, you know, I hope to hard for a long time. Well, thank you for joining us and telling us about the way the journey is going. So far. Bloom Brook Studio One point I was produced and edited by Lauren Ellis and Brian Carter Gainer. I'm Emily changing, your host and executive producer. Thanks for listening.