Web Excursions 2022-06-20
Amazon CEO Andy Jassy’s First Year on the Job: Undoing Bezos-Led Overexpansion
Amazon CEO Andy Jassy’s First Year on the Job: Undoing Bezos-Led Overexpansion
Mr. Bezos and other executives had greenlighted a strategy,
guided by a revered internal forecasting tool, that overshot the long-term projections for demand from Amazon.
Instead, despite early ideas among industry observers about a permanent shift in consumer behavior,
the pandemic-fueled growth in online shopping has slowed as in-person shopping has bounced back.
Amazon was one of the biggest beneficiaries of the pandemic tech boom.
Its revenue grew by a total of two-thirds across 2020 and 2021, and its profit nearly tripled.
But demand hasn’t kept pace with that planned capacity, and its setback has been among the most pronounced.
Now, Mr. Jassy and his team are working to sublease at least 10 million square feet of excess warehouse space,
defer construction of new facilities on land Amazon has bought and
find ways to end or renegotiate leases with outside warehouse owners.
He has closed down much of the company’s bricks-and-mortar retail operation—68 stores—and is looking to pare back its head count
He already has lost one key lieutenant, Dave Clark, a 23-year veteran who had been appointed to run the consumer business just 18 months earlier
Mr. Bezos had largely relinquished day-to-day decision making prior to the pandemic as he took on more outside interests.
But with the crisis, he dove back into the business,
helping guide Amazon’s strategy and
ensuring that Amazon could meet the surge in demand
Part of Amazon’s e-commerce challenges today stem from a piece of technology long prized during Mr.
Bezos’ tenure as a secret weapon, an internal forecasting system called Supply Chain Optimization Technologies, or SCOT.
It was designed to incorporate a multitude of factors and spit out projections for product demand and the growth in logistics needed to fulfill it
Amazon’s SCOT forecasts produced low, medium and high estimates.
Because of unprecedented volume in the early days of the pandemic, Amazon executives including Mr.
Clark repeatedly chose the higher end of SCOT’s estimates, said people who used the tool and worked on the SCOT team at the time.
Those estimates meant that the company needed many more fulfillment centers and other infrastructure to keep up
A 25-year veteran of Amazon, Mr. Jassy had long been a member of Amazon’s “S Team” of top leaders who advised Mr. Bezos.
But he knew relatively little about the intricacies of the core, e-commerce side of the business.
After taking over last July, he dove into learning the details of the sprawling retail and logistics operations,
bringing his trademark obsession with detail
Well, at AWS we did things this way,” was a common refrain in such meetings that rubbed some leaders the wrong way, said the people who attended.
Some teams found that Mr.
Jassy often tried to apply things he learned from his AWS days to very different parts of the business, such as logistics, that weren’t applicable, they said
Mr. Clark liked working with relative autonomy under Mr. Bezos and bristled at being managed closely on a day-to-day basis
Under Mr. Bezos, Mr. Clark’s team would present its plans to leadership just a few times a year
Once Mr. Jassy took over, he demanded a weekly metrics review of the consumer business
Typically after Christmas, Amazon sheds warehouse workers because volume subsides,
but Omicron lasted through February and Amazon couldn’t trim its workforce.
Once the virus receded in March, order growth slowed, but all of Amazon’s warehouse workers,
including the ones who had been out on sick leave, were back,
creating a drain on productivity and high costs.
In the quarter ended March 31, Amazon had added 14,000 workers.
After being understaffed for two years, the company was suddenly overstaffed
Mr. Clark, though, was tired from more than two years of leading Amazon’s most strained business through the pandemic and was also ready for more autonomy.
He left the board meeting feeling like he had presented a sound plan for the company
that someone else could now execute on, said a person familiar with his thinking
Inside the Dissolution of Apple’s Legacy Design Team
Ive’s absence created a vacuum, and other leaders at the company tried to fill it.
For all Howarth’s gifts as a designer, he could become defensive and passionate when engineers challenged him.
Such outbursts increased as operationally minded executives and engineers with seniority sought to increase their influence over designs.
The team he led had spent a year on a complete redesign of the iPad.
Designer Danny Coster had led the effort
He had developed a refreshed iPad with more refined curves and a lighter body that felt natural in people’s hands.
Some of the product designers working on it considered it so elegant that they said it would be the first model they would gladly purchase at retail prices.
However, Apple’s operations team determined that making the iPad would require building several new features from scratch.
The first-time costs of new machinery, a new logic board, and other components would amount to billions of dollars, an investment that would take years to recoup.
Those so-called nonrecurring engineering costs led Apple’s business division to suspend the iPad.
Such cost-conscious decisions frustrated some members of the product team.
In the wake of it, Coster decided to leave Apple and join the action camera company GoPro as the head of design.
It was the first high-profile exit of one of Apple’s core design team members
As work on Apple’s smart speaker, the HomePod, concluded, the lead designer on the project, Chris Stringer, decided that he was ready to move on from Apple.
He had joined the company in 1995 and had reached the point where he was no longer as energized by the work as he had been over his last two decades of service.
He approached Ive in February to advise him of his plans to leave
Imran Chaudhri, one of the top software designers, started plotting his own exit.
The British American, who shaved his head and dressed in black T-shirts and jeans,
had joined Apple as an intern in 1995 and solidified his role at the company
as part of the team that had developed the iPhone’s multitouch technology.
He had spent years working under Scott Forstall before being tapped by Ive to join a small group that developed the Apple Watch interface
Following common practice at the company, he told Ive and Alan Dye that
he planned to depart in a few months after he collected equity shares
that he was due to earn as part of his compensation.
Such an arrangement had become more common at Apple under Tim Cook.
It was a contrast to Steve Jobs, who had punished deserters, refusing to rehire them and treating their departure like a scorned lover would.
A month before he was set to leave, Chaudhri wrote an email to colleagues announcing his planned departure
He was fond of a line from the Persian poet Rumi, who said,
“When you do things from your soul, you feel a river moving in you, a joy.”
Playing off that line, Chaudhri wrote, “Sadly, rivers dry out, and when they do, you look for a new one.”
The email alarmed Ive and Dye.
They feared that the message Chaudhri sent could be interpreted to mean that Apple’s best days had passed.
They worried it would poison morale and moved to contain the damage.
Shortly after the email, Dye fired Chaudhri.
The move had crushing financial ramifications. Chaudhri would no longer receive his shares