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Amazon CEO Andy Jassy Cuts Costs while Seeking Needle-Moving Investments

Andy Jassy
Amazon CEO Andy Jassy Cuts Costs while Seeking Needle-Moving Investments
Source: Amazon.com

Amazon CEO Andy Jassy attended his first earnings call on Thursday after replacing founder Jeff Bezos as chief executive in the summer of 2021. Don’t get used to it, but Jassy said he would attend calls from time to time moving forward.

Current Chief Financial Officer Brian Olsavsky kicked off Thursday’s call with a presentation and revived the company’s well worn phrase, “we remain heads down focused (on driving a better customer experience).” He and Jassy then fielded questions from Wall Street analysts.

Jassy said being manically focused on customer experience was priority number one, calling it “the connective tissue for everything we do across the company.”

The number one priority in Amazon’s North American Stores business was reducing the costs to serve its operations network.

He noted that Amazon had taken a fulfillment center footprint that had been built over 25 years and doubled in just a couple of years. At the same time, Amazon built out a transportation network for last-mile delivery “roughly the same size as UPS” in a couple of years.

That took everything they had, and Jassy said it takes a lot to optimize and make it more efficient. The fulfilment centers and transportation network must link together to get products to customers. “That’s a pretty big expansion in the number of nodes in the network,” and it takes time to get them to be really efficient. “We’re working very hard at it and I’m pleased with the progress we made in Q4, but that work will extend into 2023.”

Speed of delivery and selection were also high priorities.

Jassy also opened up about how Amazon thinks about investments.

When we think about big areas to invest in, we ask ourselves a few questions:

  • If we were successful, could it really be big and move the needle?
  • Do we think it’s being well served today?
  • Do we have a differentiated approach?
  • Do we have competence in those areas, and if we don’t, can we acquire them quickly?

If we like the answers to those questions, we will invest.

He said Amazon was very enthusiastic about its investments in streaming entertainment; devices; low earth orbit satellites; healthcare; and a few other things.

It only takes one or two of them to become the fourth pillar for Amazon, he said.

“We’re going to be very thoughtful about how we streamline our costs, and I think you’ll se a lot of that, but we’re also going to continue to invest for the long term.”

You can find more information about Amazon’s fourth-quarter performance on the Amazon Investor Relations website.

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Ina Steiner
Ina Steiner
Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). She is a member of the Online News Association (Sep 2005 - present) and Investigative Reporters and Editors (Mar 2006 - present). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com. See disclosure at EcommerceBytes.com/disclosure/.