Top Wall Street company writes scathing open letter to Amazon CEO Andy Jassy – Times of India
Weaker ideas are taking away the oxygen, capital, and focus
“We fully support Amazon’s efforts to uncover and capture the next AWS-sized opportunity,” wrote Bernstein’s Mark Shmulik. “But what we’ve seen recently is a company simply pursuing too many ideas, with weaker ideas taking away the oxygen, capital, and most importantly focus from the truly disruptive initiatives that ‘only Amazon can do.’”
Time to get back to its “Day One” mentality
The analysts urge Amazon to get back to its “Day One” mentality, referring to a phrase championed by Amazon founder and executive chairman Jeff Bezos, who was succeeded by Jassy in July 2021.
Amazon needs to reduce spending
Shmulik also wrote about the areas that he thinks Amazon needs to reduce spending on. Amazon should “divest, seek outside funding, or trim spend” in health care and its nascent low Earth orbit satellite venture, called Project Kuiper. He pointed to the company’s multiyear effort to break into health care, before abandoning efforts like its Care telehealth service, Halo health and fitness band, and a joint health-care venture called Haven.
We not alone in this frustration
Based on recent conversations with investors, “it’s clear we’re not alone in this frustration,” he continued. “With all due respect, this management’s team hasn’t yet earned investors’ benefit of the doubt,” Shmulik wrote. “We’re grateful to have Andy Jassy now joining the earnings calls, but after six quarters post CEO appointment there’s still room to tighten the messaging particularly around strategy and progress,” he added.
Not happy with expansion in India, Brazil and Singapore
Shmulik also appears to be skeptical of Amazon’s ongoing efforts to expand in international markets like Brazil, Singapore and India. Reason being that competition remains stiff in these regions. He termed it a case of throwing “good money after bad,” despite the strategic value that those markets may hold.
Amazon doesn’t own its own narrative
“We get investor questions today asking ‘is AWS in last place in AI?’, ‘is retail actually a profitable business?‘, and even ‘do we want Andy on the earnings call?’” Shmulik wrote. “It points to one underlying issue: Amazon doesn’t own its own narrative,” he concluded
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